Dragons’ Den SA finale finally hit us last night and we can’t believe it came and went so fast and once again, and of course, our Dragons didn’t let us down. A special thanks going out to Lebo for the “You look like you don’t even know your own password” quip.
However, down to business and first to the den was Western Cape’s Jens Herf who pitched R1 million for up to 15% equity of ShopStar, a ‘create your own’ online shop web-tool. Cool, calm and he delivered a slick and compelling pitch, but his idea was not only years behind the market but his competition was fierce. When he’d wrapped his pitch, it was Vinny who spoke first, as he bowed out immediately due to a conflict of interest with his existing businesses.”I’m going to excuse myself from this deal with respect, but good luck”, said Vinny. Apart from Gil saying his business was ten years behind the market trend. It was Lebo who was last to speak and his primary problem was the business valuation, “You said you wanted R1 million for 15%”, said Lebo. At which point Gil mentioned that was a R6 million valuation of the business. “Nah,” said Lebo. “Nah, nah, nah, nah, nah, I’m out.”
Next up was Thabo who pitched his paperless office administration tool, Office Boykie with an ask of R1.7 million for 50%. Essentially Office Boykie is an ECM system that aims to create a 100% paper-free environment. However, for those of you who employ these systems in your own companies, you know that there are well established administrative tools like this that offers a competitive price point. “Because we all agree that what you’re offering is already in existence,” said Polo, “there is no value proposition for me as an investor and for that reason, I’m out.” Vinny then added his words of wisom, “Thabo, do me a favour, for your next business idea, start with research and understand the market and know your competitors. Focus on the designing and make it a beautiful interface. Get a designer on board and make sure you understand who your customer is and if you design great software, from that perspective, everything comes easier. Money comes easier, acquiring customers comes easier… My advice is how to build a software company, focus on those three things going forward.” And with that, Thabo left empty handed but richer for the advice.
Vanessa was next with her special healing ointment that worked wonders for everything to arthritis to general aches and pains to wrinkles and pimples. For her wonder ointment she wanted R300 000 for 15%. Essentially she wanted the money for research and patenting, essentially she was in the early stages of refinement. Vusi was having none of it. “Have you ever heard of something called the placebo effect?”, he asked. “When somebody puts something in their body and they think it’s going to have an impact. The mind thinking its going to have the impact actually has the impact. It hasn’t entered your mind that this is what’s happening with some of your customers?” None of the Dragons were convinced, too many family and friends and not enough hard sell business, and for that reason, all the Dragons were out.
Shivani Pillay was next and she entered the den with Rowan Fourie. She wanted R850 000 for 15% of Performix Plasti Dip Rubber Dip, multi purposed protective rubber. To simplify, it’s the material you wrap cars with but can also be utilised for children’s toys and a host of other uses. Problem one; although Shivani owns the rights for the product in KZN, is a distributor. Poblem two, her market is limited to KZN. Problem three, there is limited room for market growth. It was these three reasons that the Dragons conceded there was no investment proposition here although Lebo said he would invest in his car being wrapped, but that’s where his investment would end.
Last, but certainly not least to pitch in this season’s Dragons’ Den was Emile McLennan of eShip who broke the ice saying he was your go-to guy to help you ship your mother-in-law. This young man was the youngest pitcher in the series being only 18 and he wanted R5 million for 30% of e-Ship. Essentially eShip is an online shipping service that connects customers with shippers who would bid for the customer’s load and Emile’s company would take a commission fee off that. Smart if you think about it, freight ships rarely utilise all their storage space. Emile gave a spit and polished pitch, impressive for even experienced business owners, even more so from this young gentleman who had only left school last year and is currently studying at UCT. After being interrogated by a panel of impressed Dragons, the real negotiations began and it Vinny who was first to throw an offer on the table. Vinny offered R1 million for 35% with the forecast of the remaining R4 million being invested over a period of time with proviso conditions and based on success metrics. He then asked if Polo and Gil were interested in sharing the risk. It was a few months too early for Polo and she stepped away from the table. With that it was Gil’s turn, “Before I make a decision, you need to decide if that’s the kind of deal structure that suits you. If you want to take some time to think about it, you’re welcome to because this is a big deal and your life’s on the line. Your career, your life, your studies, everything. I’d advise you to think about it and tell us if you’d even consider such a deal.” Emile then asked based on the deal structure that was being offered, would he be expected to drop out of university. You would be expected to put your studies on hold,” said Vinny. “I’m okay with you finishing this year as there are only a few months left and I’m happy with you working part time but for next year, take a year off and go figure this out and get some real world experience. If you fail, go back to school and finish your studies.” Emile then called his mother to get some guidance as to which path he would take, and be sure, this would be a path that would change his life, whichever one he chose. After the call, Emile asked Gil if he was going to be part of the deal. “I first want to hear what advice you heard and what it means,” said Gil. Emile responded that he was advised to make the decision that he felt was right. “And what is that?” asked Gil. “I think that eShip and I would benefit a great deal with having two Dragons on board who know a lot about the industry and a lot about start-ups and what I am trying to do.” Both Gil and Vinny saw the massive potential in the business and cut a deal with Emile who is about to embark on an adventure of a lifetime next year. We’ll be watching closely!
And that concludes your final episode of Dragons’ Den SA season one. We hope you’ve learned and been inspired and been left with a sense of what it takes to be a truly successful entrepreneur.
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