I love how when the dragons are clearly interested in the product they go at the entrepreneur's throat over the valuation etc in an attempt to gain some leverage before making an offer. Textbook negotiating.
let's be honest the pet industry makes money out of using and abusing animals. anyone who engages in this industry or contributes as a consumer should have that on their conscience.
Especially when it's unproven and new. They don't get that u don't put a price on "potential" and "bright future". Dragons don't work on abstract, they work on tangibles
As you know they need to ask for a little more than they expect to be offered. The problem, as you say, is that they overdo it, partially because they are aware of the negotiating tactic and, unfortunately, because they are so impressed with their idea/product that they truly do believe it is worth significantly more than it actually is. As far as I can see they really do not appreciate the fact that the Dragons can create the success they want simply because they know everyone, and they carry a reputation for honesty and integrity it might take these people a lifetime to achieve.....if ever. In three words, 'they are naive.'
When he said that bit, I got worried. It rarely goes well when the entrepreneur says "there are other shareholders but they aren't here right now" because it means that there is less room for negotiations and the Dragons won't invest if they don't get a decent chunk.
As soon as I heard this lad say '...we wana be a 100 million pound company and this is definitely achievable' immediately had me losing respect for him. And his valuation of his company at 2 million quid is delusional. He has no idea how difficult it is and the life commitment that is required to get a company to a value of 2 million quid, never mind 100 million. The guys naivety is pretty clear.
It's kinda shocking and odd they don't actually know how much it's actually getting used. I'm not aware of what else is on the market but to me it seems like a really good product
They are doing ok, but the problem is they never listened and used the data gathered. They are also using low-tech device, that's simply logging motion, instead of actual "tracking". While they are doing good, in 2020 the company is still nowhere near 2 mil.
A lot of pet care products are sold on sentimentality rather than usefulness and this looks no different. If my dog has been properly exercised, he sleeps for the rest of the time (except for eating). That device for measuring activity is a novelty I might use once and then forget. He didn't say how much it sells for, so it's hard to know how seriously to take it - for £10 it's possible but for £100 no way. Peter Jones was right about the £2 million company price tag.
Interesting. Think if he had suggested 15% , they might just have gone along with that. They could see huge potential, especially if it had GPS tracker as well. Its all down to the battery.. He said it lasts a year, which is very good. Perhaps a motion generator added to it might help?
They took investment elsewhere soon after filming at a lower valuation than the rejected offer. More recently issued a similar amount of shares for 'advertising airtime'. Now crowdfunding to pay the bills and the entrepreneur's stake has reduced to single digits %. Take it away Andrew… “They did give a good valuation and a good offer but we’re aiming higher”
Interesting, he stuck to his numbers, but does walk away with global exposure. Anyway, this was a long while ago. Wonder if he did well and what happened to the database?
According to companies house, in 2019 they had a turnover of ~2 million, with total current assets values at around 1/2 million. In 2020 however they have had some sort of share restructuring and new shareholders appointed.
@@Mogamishu Depends. It could be good because they're getting more capital to help fund expansion, growth, better technology etc. It could also mean they got desperate for money and couldn't get a loan to cover it so they had to dilute shares to cover it.
I like how at the end under their breath that they say the product failed in a store already. Odds are the other share holders are at 40% and full of hot air running this intp the ground.
His valuation is based on his work he says at the start but he knows it's bullshit so doesn't dare say it to their faces as Peter used the key word - proprietary
Why didn't Peter Jones just make an offer as he sees fit based on his valuation? 9:10 He suggests 50-100k for 30% which means he thinks the business is worth about £250,000. Why didn't he just make that offer and leave it to Andrew to opt-in rather than walking out entirely? Interestingly, two other dragon value the company at around £750,000 (75000 for 10%), which demonstrates that Peter Jones is rather hawkish when it comes to these investments.
I don’t understand getting upset about high valuations by the entrepreneurs. Just make him an offer for a lower valuation what’s the big deal? All valuations are projections in the end and aren’t current values
It makes for a bad starting point for negotiation, especially when there are other shareholders not present with whom an upper limit has already been agreed
Also, Dragons Den and others like it have a rule, the person says they need 500k, they cannot accept anything less than 500k. So if their business is only worth 50k, in order to make that 500k worth the investment the dragon would need to take 100% of the company until their money is paid back. Valuations are largely based on what profits the company makes or has the potential to make. This is very very basic so you'll have to dig a little further but a 50k company will only make 50k profit to spread among the shareholders so at 500k investment it would take 10 years to get repaid. Not exactly a wise investment.
To me it sounds like the dragons are making up a nonexistent counter argument to attack and degrade an entrepreneur so they can manipulate them into thinking they are somehow wrong and accept an unfair offer. Which is fine if you recognize business is a dirty game, but to embarrass and portray entrepreneurs in such an unnecessarily negative light for the public to see is just cruel
@@vader745 just watch dragons den Ireland and you will see what I mean. Those dragons are always trying to take 40-50% of the entrepreneur’s business. The uk dragons are fairly reasonable in my opinion.
It it had a tracker and would fit cats as well I would be a customer. The product is investable considering we are in an AI runs society, all the investors had to do is to put money into the product and give it the best chance of success by adding expertise.
I always don't know why peter always mad about valuations. None of the entrepreneurs right away saying their not open for negotiations. If you're an investor really you're always open for negotiations
Ridiculous valuation. People dont seem to understand that just because they have worked really hard on their company, it doesnt make it worth 1 or 2 mil
if a significant amount of people use this device/app and send pet data back to their servers, the potential money they could make by selling that data to pet food companies etc is huge. zuckerberg got rich by selling your data and advertisements
But as Peter pointed out there is nothing unique about the device/app/tech. If the big pet companies wanted they could just easily come out with their own device. And they'd be in a better market position with the funds and expertise to back it up. This guy is just a start up and didn't even understand the potential of the data he was just focused on the device until the Dragons pointed it out.
Dragons they’ll always be wondering.... Why Do these people come With such low requests if they prefer Money without help from an Investor .
3 года назад
I paused as she asked him if he want's to talk to the wall... the guy seriously over-valued his company since he hasn't ant patent or IP for that matter. The Dragon's can focus in on what he needs to get into the big markets. I'm looking at this like "He can work his butt off trying to continue doing what he's doing and break even or take the Dragons and get a jump-start on his launch into the hundred million dollar venture he believes his gadget would bring in. He's a fool to walk away, but why the other three owners did not come in with him makes no sense.
