Say No to a Million Dollars

I heard someone say no to a million dollars the other day.

I was watching Dragons’ Den on CBC, in which entrepreneurs can pitch their ideas to 5 wealthy investors. If you’ve never watched the show, you can check it out and watch old episodes on their site.

Caution: Spoiler Alert

A pair of entrepreneurs came on pitching their idea, a website called UseMyBank, which allows its users to make payments directly from their bank accounts, without providing their banking information to client sites. Sound familiar? It’s another version of PayPal, except it works like a debit card, not a credit card.

They were asking for a million dollars for a 5% stake in their company, essentially stating that their company was worth $20 million. To back that valuation, they had current revenue of about $5 million in the previous year, of which about half was profit for them.

The problem they were facing is that there are several competitors with similar ideas to their own, and the founders, Brian Crozier and Joseph Iuso, needed a lot of money to help get a jump on the competition. Each existing site offering the service was specific to a particular country, and Brian and Joseph were looking to become the standard processor in as many countries as possible.

This was in order to facilitate their exit strategy – where a large payment processor would buy them out on account of the size of the market they control. However, to reach that point, their company needed to be able to expand quickly.

There was a deal offered, oddly, from all five investors. Each would put up $200,000 in exchange for 40% of the company – dropping the valuation to $2,500,000. A counter-offer of 15% equity for half the money, with the balance as a loan was met coldly by the five Dragons.

Brian and Joseph refused the offer.

Knowing that the episodes are filmed months in advance, at the time of refusal, getting a million dollars from anyone at any terms was next to impossible. Even now with the economy improving, their request for funds would be hard to acquire.

However, they turned down the offer because, in their opinion, the numbers didn’t match. The argument was about the value of the company. It may have been worth $20 million. It may have been worth $2 million. But with the numbers that far apart, coming to an agreement somewhere in the middle was nearly impossible.

I visited their site, and frankly, I wasn’t impressed. Granted, I can’t see the workings behind the scenes, but the look and feel to the site did not inspire me with confidence. I don’t think I would use their service, and I believe that the concept they’re operating on is fundamentally flawed, and that there is not a demand for their service, certainly not at the level of $20 million or more.

However, based, on that, were I to have received an offer like the one posed in the Den, I would have taken it. You can always back down later. But when an offer like that is on the table, you take it, and worry about the details later.

How about you? Would you have said no to a deal like that? Could you have left that much money sitting on the table?

  • Anonymous

    UseMyBank has been in business since 2002 procesing millions of transactions for the largest payment processors with a good funds rate of 99.999999%. Accepting payments from online banking helps merchants lower their processing costs while increasiing market share. We have hundreds of banks in 12 countries with 1.6 billion accounts that our merchants can accept payments from in real time.

    The company is much larger than it was last May and the value is up as well. Toronto Entrepreneurs Make Dragons Den History!

    When UseMyServices’s founders, Joseph Iuso and Brian Crozier, appeared on the March 3rd Dragon’s Den show, they did something that no one has done in the history of the enormously popular show: they turned down the Dragons’s offer of $1 million dollars!

    But it wasn’t easy and it was not a decision that was made in haste – the pair had discussed the possibility before the show, and come to terms with what they would – and would not – be willing to give up for the Dragons’s investment.

    In a rare unanimous vote, the five Dragons quickly agreed to invest the $1 million dollars Iuso and Crozier were seeking – but they upped the equity stake from the offered 5% to 40%, and the offer was rejected.

    “It obviously was not an easy decision,” said UseMyServices CEO, Joseph Iuso. ”But we are building payment solutions for companies that are household names – and to give up 40% of the company for a million dollars is really undervaluing what we have in the works right now.”

    The company’s flagship product, UseMyBank, lets customers pay for their online purchases directly from their bank account, using the online banking services. It’s cost is dramatically less than traditional payment methods for the merchant, such as credit card processing, and offers far fewer risks for the merchant as well, making it a growing favorite among high risk online merchants, such as travel, telecom and digital products, as well as more traditional web merchants.

    “It’s really a shame that we could not disclose to the Dragons some of the contracts we were working on at the time,” stated Crozier, who heads up the company’s business development team, “but it was just bad timing. The Dragons liked the concept enough to offer us a million dollars – but since we could not disclose the projects we were negotiating at the time – it was tough for us to prove the value of the company to them.”

    In retrospect, both agreed it was the right decision at the time – they just wish the timing of the show had been more in line with their projects. Since the taping, the company has launched a new website and brand,, expanded their services to Mexico & Australia, and is poised to launch a new ‘micro-payment’ platform specifically aimed at the multi-billion dollar “social” gaming niche, made popular by FaceBook and MySpace.

    “The bottom line is that both sides wanted to make a deal,” continued Crozier, “but we could not disclose enough information at the time of the taping to bring the two sides together. I think if we were doing the ‘pitch’ today – it would be an easy deal to close! The phone has been ringing off the hook since it was announced that we made the show and we’ve had a lot of very interesting meetings in the last few days – but it has been an absolute firestorm since the show aired! Who would have thought that saying no to a million dollars would be so good for business?”


    UseMyServices, Inc.’s proprietary payment technology leads the way for online merchants to expand their global reach without increasing their risk. To find out you can start accepting real time bank payments on your website, contact:

    Brian Crozier

    VP, Global Business Development

  • Elie


    I’m happy to include your version of the business pitch. That being said, your comment here is not about my post, but a press release you published elsewhere. I cleaned it up a little in terms of spacing, but in truth, copying content and pasting it here does not serve any benefit to my readers.

    As such, please update your comment to reflect the content you found on my site. This site is not a place for press releases. If you would like an article to be written about your business, please get in touch with me directly.

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