Lights are on in Dragons' Den

This week on Dragons’ Den on CBC the deals returned to normal – entrepreneur comes on the show, demonstrates his product, and leaves with a deal. Or perhaps, it wasn’t quite that simple.

Lightbulb in Pina Colada

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Robert Simoneau of Saint Laurent, Quebec, came on the show representing his company, Posilight. His company has developed a product which, if not completely innovative in nature, has an interesting application. They manufacture light bulbs for refrigerators in stores which use a large number of LED lights to provide directed light with higher energy efficiency. He had, at the time of the show, secured trial runs in two large grocery stores.

He was asking for $75,000 for a 10% stake in his company. Jim Treliving, thinking of his company Boston Pizza, commented that merely using the efficient lighting in his stores could recover the full investment in a single year. Robert Herjavec, though, couldn’t get excited about a light bulb, and bowed out.

Kevin O’Leary, acting typically aggressive, tossed an offer on the table. Trading equity for royalty, Kevin offered to invest for an 11.5% royalty until the investment was paid back, reducing to 5% thereafter. In addition, there would be 1% equity. Jim quickly offered to join him, followed by Brett Wilson.

With three of the Dragons in on the deal, Robert Simoneau tried to get Robert and Arlene Dickinson to join the deal. However, Robert was not interested. Arlene, however, decided that this would pose an interesting marketing challenge, and liked the idea in general, and so she tossed her hat into the ring. That put 4 dragons together on a deal which was rapidly accepted.

What’s interesting about this deal is the nature of the product that caught the interest of 4 dragons. The product doesn’t have to be exciting. It doesn’t have to be a market leader. It just has to strike the right chord with the investors. Having solid numbers behind you when presenting make it easier to seal the deal.