Last night episode of Dragons’ Den was pretty enjoyable for me. Here are a few observations,
* The deals the Dragons have been proposing are a lot more “creative” these days and, in some sense, less “risky” for them. Many of the offers contained loans and these loans can help the entrepreneurs as long as they are structured correctly and the interest charged “fairly” for the type of business/risk.
* The warrants and options work great for the Dragons but, very often as seen on episodes 1 & 2, much less so for the entrepreneurs. Some of the deals involving warrants and options proposed by Kevin in the first two episodes this season sounded more like daydreaming or creative drafting in a business school finance class.
* I admire Arlene‘s insight and offering of marketing services as part of deals she proposed. At the same time, I will be showing my bias and less than honest if I don’t mention these marketing services are less costly to Arlene (and with a built-in normal profit margin). Part of me also sees this as a way to get around the Dragons’ Den rule of needing all the cash asked for or “no deal”. Oh well. Looking at this from another angle, when I try to negotiate a better deal with a company, I usually don’t accept “store credit” unless I have a fixed-term contract with the company already (i.e. I have to pay them regardless of the current deal).
* While I wrote that I don’t want to review businesses with failed pitch, I can’t help but talk about Jim & Kim Georgopoulos of Freeze N’ Snip. $250K spent in developing a final product with very limited market (certainly not in the scale that matches the $250K spent) was a big enough hole that Jim wants to fill and prove that the whole thing was not a mistake. But sadly it was a mistake. Kim, being a dutiful wife, had to support Jim whole heartedly on TV (this is why wife/husband is exempted from testify against her/his spouse in court).
I hope Jim will snap out of the freezie snipper idea as it is not really a business.