Dragons' Den Special Holiday Episode

I watched the holiday special episode of Dragons’ Den, and it a great way to end Season 4. In case you’re wondering, Season 5 will start January 6, 2010 and looks to be even better than Season 4, and I’m really looking forward to it.

There were, as usual, two deals on the Den. The second was a case of Brett Wilson helping to boost creativity and dreams on the part of two girls, 11-year olds Abby Somer and Megan Boudreau who invented a game called Let’s Dance Board Game and came on the show asking for $10,000 for 50% of their company. Rather than invest in the abilities of the two girls to sell their product, who had yet to sell a single unit, Brett gave them $500 to get them started. If they made money within a year, they could pay him back, but if not, he would write it off. This went against the rules of the Den, which state that you have to get all the money you ask for in order to get a deal, but hey! it’s the holiday spirit!

The other deal, which actually happened first, was presented by Allan, Patricia, Melissa, Jordan, and Amanda Kotack for their company, Cosy Soles. Retailing at about $40 a pair, the family developed the product in response to a need for heated slippers, and have created a second product, heated mittens, which retail at about $25 a pair. Their business was growing, with a steady increase in sales over the last couple of years.

They came on the show asking for $150,000 for 35% equity. The problem, however, was not in the valuation, which seemed fairly accurate, but in the fact that none of the 3 children would get involved full-time in the business. This aversion to taking risk drove most of the Dragons away from the deal. It was as though the family wanted someone to come in and take over the business, and pay them a salary for their work.

Brett did give them a deal, but on different terms. He gave them $30,000 in exchange for 10% equity in their company. The balance of the money, $120,000 was given as a line of credit to help them offset their expenses in the short term. He made a clear point, however. The family would not be getting his time.

The lesson here to future entrepreneurs – going on Dragons’ Den is not like going to the bank with a pitch for a business. At the bank, all you want, or can expect to get, is money. On Dragons’ Den, the coveted deal includes expertise.

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  • http://www.japellow.com/ Nicolas

    Hi there,
    Super post, Need to mark it on Digg
    Thanks
    Nicolas

  • admin

    Thanks! The post is on Digg already – just search for “optimalupgrades.ca” and it will come up.

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  • http://lavenderroses.alkoottam.com/ ASHLEE

    I’ve been looking all over for this!

    Thanks.

  • Joeblow

    Completely missing the point of this show

    Do you think they cared if they got a deal or not?
    FREE EXPOSURE. If someone is involved with business they should probably know this.
    Instead of going to bank and getting a loan (With interest) to spend money on an advertising campaign, they made a very smart decision by going on National TV and getting free exposure.
    I happen to know the family first hand and the kids are extremely hard working and very much involved in the company while still working full-time jobs.
    It’s not really fair to judge on something you “watched” on TV. Since when do we believe everything we see on TV?
    The show was edited to make the family look desperate and flustered. In actuality the three of them all expressed their interest in the company and talked about how they had been invloved doing shows (On their free time) , which was not aired. If you look back at the show you will see the oldest Melissa was completely edited out of the show.

    Just an update for you. They sold over 30,000 pairs during only a week after the show aired and got countless offers from major companies wanting to be involved.

    Looks like the lesson here is. If you have a product you believe in, despite your “expertise”, take a shot at Dragons Den. After all, taking risks is what business is all about.

  • http://blog.optimalupgrades.ca Elie

    Thanks for the feedback!

    If you read some of my other articles, you will see that I do address the issue of publicity, and how this show can provide that for you at a controlled level of risk. I'm also aware of the heavy bias in editing the footage to give a certain appearance to the various people. I write based on what I see and can learn about easily online, as I do not have anything else to base my comments on, nor do most of my readers.

    In regard to this particular pitch, it's good to hear that the business did well as a result of the appearance on the show, and that they've been approached by other companies for involvement. It's often the case that a business passed over by the Dragons finds side benefits in the investment area as a result of having been given the chance to showcase their wares on national TV.

    In regard to my understanding of the purpose of the show, I'm well aware that, from the perspective of those pitching their ideas, it has more to do with making a good showing of your product than getting a deal. However, the show does give insight into what goes into making a deal, and as such, can provide some tips for those hoping to expand their business via investment capital.

    That's the point of the show for a viewer, to whom I try to address my articles.

  • Megan Boudreau

    He was definitely spreading the holiday spirit! We definitely appreciate his encouragement and support to us during that year. As well as a follow up episode, and a whole day spent in the CBC studio meeting a ton of great people! I’m a little late on commenting, but I just seen this. Thank you for the well written piece Elie.
    – Megan Boudreau

  • http://blog.optimalupgrades.ca Elie

    Hi Megan,
    It’s always great to hear from those who were actually there! I hope the show helped you move forward, and I’m sure, having demonstrated what you can do at 11, that a brilliant future is in front of you.