Some people think the Dragons should be kinder and gentler with the entrepreneurs who dare to ask for their gold. One Dragons’ Den blogger wrote, “I think it is great to be honest with the investors but there is no need to be rude. It doesn't add to the entertainment value, just the opposite.”
I don’t think this fan is referring to Arlene Dickinson, Robert Herjavec, Jim Treliving or W. Brett Wilson – although Brett sure can crack the bull whip and we are only into the third episode; so let’s circle the wagons and get back to him later. For now, I have a hunch that this comment on rudeness to entrepreneurs pitching on Dragons’ Den is attributed to alpha-Dragon, Kevin O’Leary. What if the CBC recommended that he follow Tony Soprano’s example and sit down with Dr. Melfi to work through his anger issues? How do you think it would go?
Dr. Melfi begins, “Kevin, so you say you have a lot of money?”
“I’ll say. Don’t you know I’ve made four billion dollars? Not a million…four billion.”
“OK…and you’re on a TV show?”
“Yeah. Dragons’ Den.”
“Who Wants to be a Millionaire was already taken. I suggested Who Wants to be a Billionaire but the CBC producers wouldn’t run with it.”
Dr. Melfi continues, “Perhaps we should talk about your behavior. Now Kevin, most people would be thrilled to have your success but some viewers complain that it’s distressing the way you grill those poor, brave entrepreneurs. I mean…on this last episode you called that man from Eco Anti Freeze a cockroach.”
Kevin sighs, “First of all, I asked him if he was a cockroach and that’s because I liked his business. I need to get him worked up, see how he reacts. Hey, when it comes to your own investing, money can disappear pretty quickly. You may have noticed the stock market?”
Dr. Melfi shudders, “But the point is - you could be nicer.”
“The point is to see if I like the guy because if I invest, we become partners. Besides, even Robert Herjovec told the guy he had an edge.”
“But he said it with a smile. Perhaps you could channel your anger like that?”
Kevin raises a valid issue that when you raise private equity capital, it is all about partnership. When the Dragons invest, it is not like a bank loan which is passive. It is venture capital which means the Dragons are giving money for a piece of the business to become an active partner. They need to get into the boat to row with the entrepreneur for five years and it is known that some investors will rile up an entrepreneur to assess their personality. Character is important as the Dragons will introduce the entrepreneur to people in their network and that reflects on them. The Dragons will meet the entrepreneur frequently, build the strategy, phone him and trust his business skills. The Dragons must be confident that they can get in that row boat together and pull the oars in the same direction. That’s the point.
It does not take away from the fact that pitching your business deal is very hard whether you are on TV or not, and can be underestimated by the majority of owners wanting to raise capital. The two fellows with Eco Anti Freeze are an example of how quickly a presentation can go from good to grotesque. Jim Treliving owns Mr. Lube which is a client of Eco Anti Freeze in Vancouver already, and it was obvious Jim was pleased that the team had done their homework about his possible interest. Recycling of chemicals is a growth business so all the Dragons looked interested. Unfortunately, when the questions began, the wheels came off. Fair or not, you need market data to back up your statements or at the least, to try and give a response. There is no doubt Eco Anti Freeze will find an investor if they allow financial partnership in their overall company, not just Ontario, and they work on their market analysis. Rest assured, they will live to see another day and do well.
Compare that presentation to Darryl with the Buster Rhino BBQ sauce. As he presented, Darryl took on the questions with flair. Although he also lacked numbers and was sketchy on the use of investment money, Darryl made it clear he would be a fair, flexible partner. As Robert Herjovic and Brett Wilson told Darryl as they handed over a cheque for $200,000, “That was not the sauce, that was all about you. That was wonderful.” So Darryl will be grillin’ and chillin’ with the Dragon team because he kept his head and they liked his attitude.
“Kevin,” Dr. Melfi continued, “Can you empathize with these business owners risking their reputations to come on TV and show what is close to their heart – their business?”
Kevin leans forward, “Agreed. But when is the normal entrepreneur going to have five top experts focus on their business? Never! What about the millions of people watching – someone’s going to like what they see even if us Dragons don’t. Past presenters have gone on to raise capital – last year there was a group who raised millions after being ‘distressed’ on the show. Wish I’d had the Dragons’ Den opportunity – I would have jumped at it.”
“Even if it made you look like an idiot?”
“Absolutely! To get that kind of television exposure is worth it – yes, even if you look goofy. You’ll be so much further along than if you’re still in your basement thinking your product’s going to change the world.”
“But couldn’t you just say ‘I’m out’ without slamming them? You told one nice presenter that you would rather put needles in your eyes and let a truck run over you. I’m concerned about how you are damaging your reputation and embarrassing people.”
“Listen lady – a lot of people told me I was crazy. Did I cry? OK…a little but that stays in the cave. I listened. I asked questions. I learned. I adapted. I changed my business. Do you think I got to where I am without pain? I had the sweats. In the middle of the night. For years! Does anyone care about that? Nooooooo…”
Dr. Melfi glances at the clock, “Well, Kevin, that’s it for today –same time next week?”
J.B. Loewen raises capital for established companies and is the author of Money Magnet: Attracting Investors to Your Business.