Entering the Dragons Den
If you're interested in innovation, entrepreneurship or just running a business then a new series on BBC2 called ' Dragon's Den' is simply unmissable. The first episode was aired tonight (Tuesday 4th Jan) at 8pm and placed a variety of entrepreneurs in front of five investors - all very successful and very rich business owners themselves - and got them to 'pitch' their business idea. The entrepreneurs have to have a sound business plan and must request a specific amount of cash - there's no limit on how much they can ask for but the more they ask for the more convincing they have to be in persuading the 'dragons' to take the risk.
Only one entrepreneur was successful tonight - his umbrella vending business idea got an investment of £150,000 in exchange for a 40% equity stake (though he planned to give away only 20%). And that raises one of the most interesting facets of the programme - the amount of equity or ownership that entrepreneurs are prepared to trade in order to get their business off the ground. The partners of one other start-up showed a product that rocked babies to sleep while still in their pram - the 'dragons' were clearly interested but the failure of the partners to give away more than 5% equity meant that they lost any hope of a deal. Why wouldn't they give away more than 5%? Probably because they thought that since they had the original idea and had put in all the work so far it felt wrong to give away any more. But in practice the 'dragons' weren't just offering cash but also a whole stack of expertise, enthusiasm and commitment in helping get the business off to a flying start. An innovative product or business idea is the essence of intellectual capital, but the ability to take that idea to market successfully needs bags of know-how in other areas too. 60% of a successful business is clearly more desirable than 95% of a neat idea. Talent and capital dancing together. Don't forget to catch next week's episode - it's compelling viewing for all business people.
ExLink: Preview in the Guardian TV Guide
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