BBC have got another interesting series on (I really need to get out more) at the moment, called Dragons’ Den. This is a new type of “real-life show” where budding inventors and businessmen are brought face-to-face with five potential investors and venture capitalists (the dragons). The potentials come in with a financial goal and have a certain amount of time in which to do their sales pitch and try to win one (or more) of the dragons over and get them to invest in their businesses. They come in one by one, and different potentials do not directly compete with each other; they are individually judged by the dragons as they stand before them and are given a yes or a no immediately.
The idea is, basically, that people that have good ideas and a good business sense might find the backing of investors that have a proven track record, in order to get them going in the Big League, as it were; naturally in exchange for an interest in the company - normally a share of equity and commitment from the entrepreneurs themselves. Some people do meet their matches, some people manage to sell their ideas to the dragons, and go away with financial backing and what they came for (of course, if they don’t achieve at least 100% of what they came for, they will not get anything at all) - others do not.
It’s amazing really; some of the people that face the dragons really have no clue about what they are doing. The guys are struggling to remember what margins they have on their products - how much money they make from every unit sold -, they can’t remember the names of their distributors, they twist and turn facts to make their products more attractive and they omit vital information from their potential investors. Some girl the other day claimed that her board game was going to be launched by the legendary London toy store Hamleys in a few weeks time - what had in fact been agreed was that Hamleys would provide her with a table where she could sell it on their premises, but they would do nothing about the launch themselves. Another guy today had all but struck a deal to get full funding for his project when he let slip that he was going to keep the patents for himself and not give the dragons any share in his US business - they threw him out immediately. You can’t try to be smart with these people - they are investors, and the reason that they are still there is that they can spot phonies.
Needless to say, the vast majority of applicants are rejected. Following up on today’s trends in television, these dismissals are harsh, bordering on cruel. The dragons (at least some of them) are doing a slightly better job at being merciless than Anne Robinson on The Weakest Link, and to be honest - I don’t enjoy seeing people being subjected to abuse simply because they are not businessmen or do not come prepared enough. OK, some of them don’t have a “good enough” product to make money from, and some don’t put the required effort into their business - but that is no reason to treat them like lesser human beings. Comments “You say you’re studying to become a doctor? I would suggest that you go and see one.” and “That is by far the worst business proposition I have heard. Do you really expect me to invest in this?” are not uncommon from the dragons.
Now, and here’s my point with this post, I think this show has its sides. Of course, for those that receive their funding from the dragons, this is naturally good - perhaps they may be required to give up more equity than they had expected, but at least they get funding and support from people with connections. For some entrepreneurs that watch the show, it probably gives them some good pointers to think of before going to find sponsors for their businesses as well, possibly it will even open their eyes for the fact that it is possible to find investors. I do think, however, that the larger portion of the could-be businessmen are put off by this overly ruthless attitude presented by the business professionals.
We see the same in the talent-based shows (Idols, Fame Academy, Fame Factory, all depending on where you live) - there must always be a record label executive on the panel to tell the participants The Truth so that the candidates will become Prepared For The Business. I think it’s uncalled for at this early stage in someone’s business/career - let the person make their own mistakes once they are in the business, instead of, out of some kind of presumed mercy, “help” them by clipping their wings before they have even left the nest. Don’t underestimate people’s abilities, and even if you don’t find it the right business for you to invest in - let them know this in a civilized way and give them positive feedback instead of downright criticism. Especially when it’s done on TV, since this will very likely affect more people than the poor person you’re tearing apart in front of you.