Key Points:
Investment: £45,000
Investor: No deal made
Equity Offered: 15%
Business: Handyscoop (pet accessory business)
Target Audience: Dog owners, including children and elderly people
Challenges: Patent ownership, marketability, and product viability
The Pitch
John Nichols from Ledbury, Herefordshire, pitched his innovative Handyscoop products on Dragons' Den, seeking an investment of £45,000 in exchange for a 15% stake in his company. Handyscoop offers two sizes of poop scoops, designed to make picking up dog waste more hygienic and convenient. The products feature a unique bagging system that seals in odors and can be attached to various aids like walking sticks and pushchairs, making it suitable for users of all ages.
Financials and Offer
John shared that his company has sold nearly 35,000 units in the past five years. He projected a significant increase in sales due to recent improvements in packaging. Despite these sales, John struggled to provide clear financial details, especially regarding the licensing agreement for the product's patent, which he did not own but had full selling rights to. He estimated the company would reach a turnover of £900,000 within the next 12 months, a significant jump from the current £60,000.
Challenges Highlighted by the Dragons
The Dragons raised several concerns:
- Patent Ownership: John did not own the patent but had a licensing agreement. This lack of ownership was seen as a major risk for potential investors.
- Sales Figures: Despite the claimed potential, the sales figures were low compared to the projections. The Dragons were skeptical of the sudden expected growth.
- Product Design and Market Appeal: Some Dragons felt the product was bulky and not sufficiently appealing to the broader market. The potential inconvenience of carrying the device was highlighted as a drawback.
- Lack of Clear Financial Information: John struggled to provide specific figures regarding the licensing agreement and sales targets, leading to doubts about the reliability of his business plan.
Conclusion
Despite John's confidence and preparation, the Dragons were not convinced by the Handyscoop's market potential and the unclear details about the licensing agreement. All five Dragons declined to invest, leaving John to continue his venture independently. John's experience underscores the importance of clear financial knowledge and full control over product patents when seeking investment. While the Handyscoop may have potential in niche markets, securing investment will likely require addressing these critical business aspects.