Singing Pig

Hi all

 Having just watched the first episode of the new Dragon's Den I have a question I'd like to pose to all posters here:

Why is it that a big proportion of aspirig entrepreneurs have no idea about numbers?

Is it the pressure that confuse them?

Are they really as bad as they come across? And, if yes, why is it?

Views?

Thanks,

GFM

Haven't watched it yet, but I have it taped for tomorrow.

Despite it being the first step towards eradicating them, very few people are willing or able to admit their own weaknesses, even to themselves.

As long as they seek endorsement from family, friends, and others who are loathe to criticise without bias, they will never have to face their shortcomings.  And when faced with the likes of the Dragons for the very first time, it can be a very rude awakening.

It's a remarkable man who faces his fear and his weakness, and yet has the will to overcome.

Regards

Massive

true but...my point is: if someone is running a business at the very least this somebody MUST know revenues and profits of this business (otherwise how are they running it?). Nobody would ask them to calculate the square root of 1,000 live, but going there without knowing your revenues and profits seems absolutely bizarre to me.

So, because it seems so bizarre (I imagine people prepare a lot before going there), I wonder whether the specific conditions act on people (pressure, stress, etc).

So, yes, we all have weaknesses but aspiring entrepreneurs who can't count seem a very common combination --> Perhaps the ones who can count don't want to take risks and hence do not start-up? What is it? I need to understand...

GFM

I'd like to think it's the pressure of the moment, but knowing the general public as I do, alas I fear the worst.

In truth, I think it's a combination of all things - niaivety, poor preparation, poor numeracy, and the pressure of baring one's financial soul on camera under harsh questioning.

Although it's hard to see how pressure would contribute to the reggae sauce guy over-estimating the worth of a potential order by a factor of 1000!

I did feel a little sorry for the lady with the stress therapy franchise.  Fluent as she was, English quite clearly wasn't her first language, and she stumbled over the financial terms when hardly given pause for breath.  Deborah Meaden rather unattractively seized the opportunity to be the first to publicly tear a strip off a younger and more attractive rival.  Only my interpretation, of course, but interesting to see even the high and mighty still driven by such petty jealousies.

Regards

What I don't understand is the way they all say how much they want BEFORE explaining what the product is, and it's potential market. Very much cart before the horse, but yes, why are the majority of presentations so inept ?.

It's interesting that most of the ideas the Dragons do back, sink without trace and at least two they turned down have made it.

RogerD:

It's interesting that most of the ideas the Dragons do back, sink without trace and at least two they turned down have made it.

Agreed, but such is the nature of venture capital.  For the startup, this really should be the last resort - to the investors, their company is usually just an opportunity to make a fast buck.  Venture capitalists will typically negotiate enough equity to have a guiding hand in the future of the company.  And since they usually want to see a significant return within a couple of years, this means the company gets sold off once it's in profit.

Not always a bad thing, but not necessarily quite what the original creators had in mind.

If there's any way to raise finance without giving a huge slice of pie (and quite possibly control of your company) to an external investor, then I suggest independant financial success is far more desirable. 

Those that go it alone retain their identity, and as such their success can be observed.  Those that farm out large slices of equity may well still find financial reward, but are unlikely to persist in their original form.

Regards

Having watched this programme, what really puzzled me was the rationale behind the decision of some on the dragon's as per the massage treatment franchise sweetheart and the sauce-y singer. Both messed up their figures hard. The former mixed up the semantics of concepts "turnover" and "net profits", giving confusing figures for turnover when she really meant profits. The latter, the Reggae Sauce man, sold to the Dragons his "order" of 2000kgr of his sauce to be equivalent to 2,000,000 litres of sauce...!!! On equally messy grounds regarding their pitch (although to me the gent's mix-up was much more serious than the lady's who had a better case due to a better laid out business plan and brand than the gent) the lady was shown the door straightaway whilst the singer man got his money conceding double of his initially proposed equity. Which makes me wonder that sometimes investment decisions have a strong subjective element alongside the objective element of figure stackup. Go figure!!!!.....

 Aris
 

Yes Aris, it does make me wonder how much goes on behind the scenes.

With such sums at stake (and indeed good TV to make) the Dragons must surely be 'primed'.

The reggae sauce guy was clearly pre-selected as 'the star of the show', and from the moment he stepped before the Dragons and received a round of applause for his performance, he was assured investment from them, however innumerate and non-sensical his pitch.

Conversely, the stress treatment lady, who had already achieved a measure of success and gave a respectable account of herself, was a lamb to the slaughter from the moment she entered the room.

It's reassuring to know that as a Dr of genetics and successful business woman, she'll soon realise that she's far better off without their greedy profiteering.

I enjoy the program and admire the Dragons, but I'd prefer to see genuine business decisions rather than see them 'playing to the camera'.