Member Article

Dragons’ Den: It’s Not Reality

Dragons’ Den is right up there with The Apprentice as one of the best “business” shows on TV. The longevity of the program is testament to that. The fact is however that Dragons’ Den doesn’t represent reality in any shape or form – just ask anyone who has ever sought angel investment for a business. Put it this way: If you think Dragons’ Den is tough on entrepreneurs, just wait until you hear about how life really is pitching big ideas to angel investors.

Real life investors have all the time in the world

Think about how many awkward questions the Dragons ask in each five minute slot on the show. They ask loads. Imagine how many questions the Dragons would ask if they had all the time in the world? Thousands, quite probably.

The thing with angels in real life is that they usually have all the time in the world to grill you – so if you think the bombardment of questions is bad on Dragons’ Den, wait until you experience it for real. It’s not just questions you’ll be asked during your meeting either – often angels will call you up at all kinds of hours asking niggling questions they’d forgotten to put to you previously. Prepare to be interrogated like never before.

One other thing to remember is that angels will go away and do research on you, your idea, and the answers you’ve given them. If you’re asking for a £1 million investment to kickstart a business that you’d told them has no competition, they’ll be pretty mad if it turns out five other companies are already doing the same thing (needless to say, they won’t invest either).

You need to know numbers, lots of numbers

The Dragons usually tie pitchers in knots when it comes to figures. Meeting with a real angel will be no different. They’ll ask you to quote all kinds of figures from your total turnover for the last month, to your total expenditure on raw materials over the last three years. You need to remember all of these figures – they’re really important.

If you honestly don’t know a figure you’ve been asked for, don’t make it up. Be truthful and say sorry but you’ll have to double check that figure. Angels will revisit the same questions time and again to ensure they get consistent answers from you. If you can hold it together honest answers just roll off the tip of your tongue, your potential investor will be very impressed.

Get your business plan up to scratch

We don’t hear a great deal of noise about business plans on Dragons’ Den. In real life however a business plan is often the document that will secure you a meeting with an angel. Before they even see you in person, they’ll request a copy of your business plan to see whether or not meeting you is worth their time.

Your business plan should be a well-oiled manuscript with a clear discourse. People will tell you that business plans should follow a standard syntax but they’re wrong. Business plans do need to follow a general structure but it’s not frowned upon to adapt a business plan template to suit your own business. Spend a good few weeks perfecting your business plan – if it isn’t awesome any potential angels reading it won’t get past the first page.

Not everyone is as squeaky clean as the Dragons

Some angels like the ideas put to them a lot, but they don’t like the person putting the ideas to them. In such a situation some angels may go ahead with the idea using their own personnel. It’s therefore important that the relevant documents are signed before you pitch ideas to angels (non-compete, NDA, etc). Once you’ve parted with your idea, there’s no going back.

Shady angels do exist – they’re few and far between but they are out there. Protect your intellectual property as best you can otherwise someone else could end up making millions out of your idea.

Feedback

OK, we lied. Dragons’ Den is partly reality. The feedback stage is the part that draws the viewers in. There’s nothing like watching some poor soul on the TV have their hopes and dreams crushed like an empty Coke can. The Dragons make a habit of doing this at least once on every show. Real life angels are no different – if they think your idea is rubbish they won’t just politely decline the opportunity to invest, they’ll list each and every part of your business idea that’s going to fail miserably.

If you’re on the wrong end of some negative feedback from investors don’t take it to heart. It’s obviously very hard not to take it personally, but the fact is more often than not they’re giving you the feedback to help you. If the idea is truly terrible and they just know it won’t take off, they don’t want you to waste any more of your time or money on it. It might sound like they’re being horrible, but sometimes you just have to let go of an idea if it just isn’t good enough. Real life angels make the Dragons look like soft fluffy kittens when it comes to dishing out feedback.

Dragons’ Den is a great TV show, but similar to this article on why the Apprentice isn’t a real life business lesson, it’s not reflective of the process of obtaining angel investment funds in real life business. It may come as a shock to you but if anything, the Dragons are far too nice.

This was posted in Bdaily's Members' News section by Adam Grunwerg .