Just say no

7 August 2007

Thank goodness for James Barnham at About Time Design. The Dragons' Den 'Where are they now?' show, recently airing on the BBC, was largely an opportunity for smug tycoons to celebrate their successes and rub failures' noses in the poopy stuff. But g2i participant Barnham was an exception.

Barnham is the man behind the Nova-Flo, a mechanical product designed to turn off the water to prevent baths flooding (see Nova-Flo case study in the 'Resources' section). He appeared on Dragons' Den last summer and Duncan Bannatyne, Peter Jones and Theo Paphitis were all prepared to stump up the £150,000 he was looking for. But while Barnham was offering 10% of the business, they demanded 40-50%. He turned them down and subsequently got a better deal elsewhere, proving something we've always suspected to be true: inventors sometimes know better than investors.

Barnham was philosophical when he returned to the small screen for last Wednesday night's show. 'I feel the dragons missed a trick in not investing in the business,' he said. 'I'm a little bit sad I haven't been working with them, but I think at the end of the day it's their loss.' Fair point - he's now about to start manufacturing 25,000 units and is predicting £1.5m sales and a half million profit in his first year alone.

To be fair, it isn't the only opportunity the Dragons have missed. Last week, the show recalled how James Seddon accepted an offer for a stake in his business which makes a single egg cooker called the Exactly, 'a sort of toaster for eggs'. With a whole generation of males still unable to boil an egg in the kitchen, this was clearly a tempting investment, and Richard Farleigh duly asserted that he could see the product selling 'zillions'. But while Seddon wanted £75,000 for 10%, Farleigh and Jones stepped in with the cash for a joint 40% stake. Seddon later tore up the deal, arguing like Barnham that he could get the money for less elsewhere.

Reality TV is often more divorced from the real world than drama, but this time round it's on the button. Flushed with the excitement of interest from a hotshot investor, it's easy to see how an entrepreneur could be tempted to accept the first offer they get. But as the ubiquitous shots of piles of Dragons' cash remind us, it's all about the money - and if the numbers don't stack up for you, don't be afraid to turn it down.

By David Longworth