Key Points:
Investment: £50,000
Investor: Duncan Bannatyne
Equity Offered: 20%
Business: Businessproper.com (automotive and vehicle accessories)
Target Audience: Owners of pickups, vans, motorbikes, quad bikes, and scooters
Challenges: Cash shortfall, high stock demand, securing bank loans
Adam Weaver Secures £50,000 Investment on Dragons' Den
In a tense episode of Dragons' Den, Adam Weaver, the founder of Businessproper.com, managed to secure a £50,000 investment from Duncan Bannatyne in exchange for 20% equity.
Adam Weaver, an online entrepreneur, entered the Den seeking £50,000 for a 5% stake in his business, Businessproper.com, which specializes in selling accessories for vehicles like pickups, vans, motorbikes, and scooters. Despite his impressive growth and solid profit margins, Weaver faced significant scrutiny from the Dragons.
Business Overview
Adam started Businessproper.com four years ago with just £3,000. The business quickly grew, achieving a turnover of £155,000 in its first year, followed by £2.15 million in the third year, with a net profit of £205,000. The forecast for the next 12 months projected a net profit of £500,000, expected to rise to £900,000 thereafter.
Challenges Faced
Weaver's business, though profitable, faced a substantial cash shortfall. He had previously approached a bank for a £250,000 loan but received only £150,000, and the bank also withdrew his £40,000 overdraft facility. This led to a debate among the Dragons regarding the financial stability and capital needs of the business.
The Pitch and Offers
Adam's pitch highlighted his business’s rapid growth and the potential for further expansion. However, Deborah Meaden and Theo Paphitis raised concerns about the identified cash shortfall and the substantial amount of money required to maintain stock levels. These concerns led both of them to decline making an offer.
Duncan Bannatyne and Peter Jones saw potential in the business and made competing offers. Duncan offered the full amount for 20% equity, emphasizing his understanding of Adam’s approach. Peter, leveraging his extensive experience in online businesses, countered with an offer for 25% equity, arguing that his expertise would bring significant value to the company.
Final Decision
Faced with two substantial offers, Adam chose Duncan Bannatyne’s offer of £50,000 for 20% equity. Despite Peter Jones' compelling case and global reach, Adam felt a stronger alignment with Duncan’s approach and business philosophy.
Conclusion
Adam Weaver's decision to partner with Duncan Bannatyne marks a significant milestone for Businessproper.com. With the new investment, Weaver aims to overcome the cash flow challenges and continue driving the business toward further success. The deal underscores the importance of strategic alignment and the value of experienced investors in scaling a business.