Friday, June 8, 2007

Time in the Trenches 2: Surviving the Dragons' Den

I think this was one of the critical events for the business - getting onto Dragons' Den. We pitched there, we received an offer and had to keep quiet about it for months while we were going through due diligence. This is when you truly feel how hard it is to keep a secret.

Everyone always asks: "Hey...weren't you on Dragons' Den?"..."How was the filming? Was it scary? Did the Dragons try to tear you apart?"

I actually found the experience a lot of fun; it was different from the other competitions that the business had participated it and of course it would be aired on national television.

I always get the "What did the show do for you?"

It did many things for us. Publicity for one; we were bombarded with emails from interested Beta users right after our session aired on CBC. The downside was that our service wasn't built yet, and everyone expected that it was already up and running. Seriously. We aired less than an hour ago and was made an offer at the same time...we had no problem putting together a prototype in less than an hour ;)

LESSON #1: Don't have the publicity/hype for your business precede your service launch by a LONG period of time. What's good timing? I would think a month of lead time is just right. Of course, it's difficult to time when to receive good publicity.

LESSON #2: As long as you haven't signed an exclusivity agreement which keeps you from shopping around for other investors, make sure that you DO shop around! Just because you're going through due diligence doesn't mean you can't connect with other interested investors and pitch to them as well! More interested investors = more leverage for your business and likelihood of getting a better deal for you (if the interested investors don't team up against you...)

LESSON #3: You might not end up closing the deal. We didn't. It didn't really make sense to give up more than half of our company at that valuation. In fact, I'm still bootstrapping the business right now. I know that start up businesses all need money to operate, but if you can afford it, be picky about your investors...because they will end up being your partners. Can you stand sitting in a boardroom with them for a day and having them call you when business isn't great and asking you where their money is? Always opt for smart money. This means you should find investors that can contribute their relevant expertise and industry contacts IN ADDITION to their money.

So that's what I took away from this experience. Best of luck to whoever is reading this and looking to pitch in the Den!

1 comment:

Carol said...

What advice would you give someone who is going on a similar show?