A reader asks:

You keep mentioning Dragons’ Den, I’ve figured out that it’s a TV show, but what does it have to do with Business Opportunities and Ideas?

Dragons’ Den is a TV show on which entrepreneurs and want-to-be entrepreneurs, who have what they believe is a good, viable and potentially very profitable business opportunity or idea, but who lack funding pitch to a panel of business angels. Except in true reality TV style there has to be an element of confrontation so the angels are referred to as Dragons.

Each of the entrepreneurs is given time to present to the Dragons, although only a short section of this is shown on TV, (usually between 30 seconds and five minutes, followed by questions and any negotiations). Prior to the show the entrepreneurs have been asked to specify the amount of money that they are pitching for, and the rules stipulate that if they do not raise at least this amount, they get nothing – a rather silly rule, but it helps to create a “jeopardy moment” so beloved of TV producers.

Once the entrepreneur has made their pitch, the dragons ask questions, far too often revealing an embarrassing lack of preparation on the part of the contestants (you can’t help but wonder if some of them have even watched the show, they are so unprepared) or uncovering problems with the business which put them off investing. In a typical show there’ll be between five and ten pitches, only one of which will recieve investment.

In return for investment, the entrepreneurs offer the dragons an equity stake in their business, the size of the equity stake (and therefore the valuation of the business) is then the point under negotiation if an investment offer is made..

In the UK the current Dragons are:

• Peter Jones
• Duncan Bannatyne
• Theo Paphitis
• Deborah Meaden
• James Caan

Other angel investors that have been Dragons are:

• Simon Woodroffe
• Rachel Elnaugh
• Doug Richard
• Richard Farleigh

Unfortunately the BBC has a habit of replacing the best Dragons (Doug Richards, Richard Farleigh and Simon Woodroffe) so they’ll probably replace James Caan next. It’s a shame as they all offered good constructive advice and don’t tend to get make rude or snide comments, unlike some of the other Dragons.

Rachel Elnaugh left Dragons’ Den after her business Red Letter Days went into administration. Apparently she had disputes with various Dragons (probably those who brought Red Letter Days) and agreed to leave Dragons’ Den as the BBC felt it could not allow a perceived “failed” business person to be on the show.

If you’d like to get get on Dragons’ Den visit the official BBC Dragons’ Den website and fill in the application form. If you do, please try to be as entertaining as Ling’s Cars or Rick Gervais did for Children in Need, it’s entertainment TV after all. If you really want business angel investment you’re probably better off reading my post How To Find Business Angels .

Asking John:
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