Dragons Den:

Dragon’s Den is a TV Series hosted by Evan Davis with 5 of the wealthiest and most visionary investors in UK: Peter Jones the Technology Titan, Deborah Meaden the Serial Investors, Tej Lalvani the Supplement Supreme, Touker Suleyman the Fashion Retail Tycoon and Jenny Campbell the Cashpoint Queen. This blog will be focused on Dragons Den season 15, with 3 entrepreneurs willing to sell their inventions and business to the ‘Dragons’. I will interrelate this episode with the theory of Shareholder Maximization which is the importance of financial sustainability for corporations to gain high profits and cash which ensure payment of dividends to enhance Shareholders wealth which will increase the value and price of the stock.

Play Brush

The first Entrepreneurs are Mateus Aetna, Paul Varga and Tulu ogen cena with their digital toothbrush connected to an Ipad called play brush, the target market audience of children that enjoys playing games and insufficient dental hygiene:

However, the entrepreneurs only willing to give 1% return which is ridiculously a low return and prevents shareholder maximisation. The product do have a great meaning to persuade kids on being dentally healthy, however, personally it is terrible and the execution has some defaults such as the game is limited on which children might experience boredom in a short period of time and since nowadays children are interested in video games based on PUBG, Fortnite, Mobile Legends, and other games that uses both hands, and not just one hand going up and down from children’s mouth; signifying that children will still not provide responsibility in dental hygiene, rather they will just play video games Furthermore, in 2016 they had a €1.2 million (bravo), gross profit €240,000 which is very low, what happened there? I guess caused by high cash outflow in investing resources, labour and machines and a loss of €800,000 a large operating expense. I was surprise and agitated that the ‘Dragons’ pitch in £100,000 to their business for 3% to 5% return, signify as still a low return that will not provide Shareholder Wealth Maximisation, which should not be done, however the entrepreneurs decline the offer.

Gravity

The second participant are Mike Fisher and Shane Burnham looking for a £25,000 investment with 10% ownership of the business. Their product is Gravity shown at image below:

One for the neck which in theory helps neck pain and one for the back which is for back pain (place it on the sacrum to adjust our spines). From the ‘Dragons’ Quality Assurance, they claim that the product is not that comfortable, does not have an impact physically on their back and neck, and this product is unusable in the UK because individuals in the UK likes to exercise, doing sports, being active, healthy, which signify the level of individuals with back or neck pain is low, thus the product is a niche market and requires really intense personal selling. Furthermore, the entrepreneur’s does not have any data and evidence for this product to work which is rubbish.

Personally, if I have back or neck pain I would just attend a 1 month massage therapy for £50, instead of buying Gravity for £99 with insufficient results from the treatment. Furthermore, I would just pay £300 from a company that sells massage chairs that has already been scientifically proven to function well, have great results and that has different functions not only for back pain but for legs, arms and neck. At the end, the Dragon’s decline the offer because of low data and evidence for the product to function perfectly.

Tickle Tots

The third Entrepreneur is Sophia create her product called Tickle Tots which is a modern cloth nappy that is reusable, compare to disposable nappies that will increase land pollution. She’s looking for £50,000 investment and 20% share of ownership. Personally, this product is a futures product, means that its new to the market with low market shares and product awareness, however based on the quality of the product, the objective of the product to the environment and for babies is brilliant. Furthermore it may save the money for consumers to spend on Tickle Tots instead of continuously spend on disposable nappies.

Sophia claims £18,000 sales in previous 18 months of trading but a loss of profit, thus in the eyes of 4 of the investors this product is based on niche market, with high expenses not worth to be produce to the market and may not be profitable in the future. However, for Touker Suleyman, his willing to invest 50% of the ownership of the business, Sophia was not fond on that, but a further negotiation that Touker will gain 50% return after that will give 10% to Sophia thus 60% ownership for Sophia and 40% ownership for Touker after the given return of 50%. This is a sufficient investment deal and personally Sophia’s business will be successful because its the product of the future, means that in short term have low profit but in long term she will gain high profits and maybe a benchmark of future businesses, thus in the long run a stagnate growth has the opportunity of increase in growth gaining high profits and making sure that Touker and other investors to gain high returns and ensure shareholder maximization.