Whoever said gaining finance on Dragons’ Den was easy, lied. But startup Pouch did just that. In fact, it gained an offer from all five investors, leaving its founders with a difficult decision to make.
This year saw the show’s cushy seats filled by Tej Lalvani, the CEO of Vitabiotics, Jenny Campbell, the founder of YourCash, alongside returners Deborah Meaden, Touker Suleyman and Peter Jones. And it’s their business knowledge, Pouch CFO Jonny Plein admitted, that the company was after.
Pouch, a free-to-download plugin that alerts you to available discount codes, has been taking the market by storm. Borne from the frustration of endless expired voucher codes and acknowledgment of the linked – and rather costly – impact of shopping cart abandonment, founders Plein, Ben Corrigan and Vikram Simha, have grown an empire that includes over 3,500 stores.
“Now all we needed was an investor to add experience and help open doors,” Plein explained – a Dragon to help slay would-be rivals. This meant, however, passing an online screening, telephone interview, audition and due diligence process, all before ending with a three-minute pitch.
It’s quite a rigorous experience, we previously found out from Kevin Stevens, who joined Dragons’ Den in 2012 to gain backing for his Snowmule backpack. A huge amount of information is demanded prior to the pitch as the Dragons have no contact with the entrepreneurs before the show. They genuinely have no idea about the people they’ll meet or products they’ll discover.
Plein echoed the sentiment, saying the BBC’s due diligence was far more detailed than he imagined. “Every number and statistic said/included in the interviews/application needed to be backed up, so it’s a good job we didn’t bullsh*t our figures. And after two months of due diligence we were given a pitch date, 4 May 2017. We had six weeks to get ready.
“This involved practicing in front of countless advisors and mentors who all pretended to be ‘Dragons’. We even hired a speech coach to help us with our presentation style – Ben (also the chief revenue officer) is not a fan of public speaking!”
There was much to take into account. For example, a valuation had to be decided on prior to filming. The producers warned the team that asking for too much money – “typically more than £100,000” – would lead the conversation away from the business, reducing the time they had to praise all things Pouch-related.
“With this in mind,” Plein detailed, “we went for £75k for 15 per cent, a £500,000 valuation, which we knew we could justify if pushed on it. We also decided a two-man pitch would be smoother than a three-man pitch, so Ben and I talked to the Dragons whilst Vik waited outside the room.
“The Dragons could speak to Vik if they wanted to learn about the technical details, but we couldn’t bring him in unless they said so. This was a shame as they didn’t ask any technical questions – Vik didn’t get a chance to shine. But there will be plenty more opportunities for our awesome CTO.”
Read on for advice when it comes to pitching on Dragons’ Den