Dragons Den Ideas Review - Series 1 Episode 8 - Summary and Analysis of Entrepreneur 2

Last night saw the first episode of the new 2010 series. There were many different characters who came to try and convince the Dragons to part with their riches and invest in them. Here is my Dragons Den ideas review - summary and analysis: a catch up on the main points and my thoughts on what happened for the second entrepreneur, Jeff Bowen.

Entrepreneur 2 - Jeff Bowen

Former environmental consultant, Bowen, from Devon, showed off a line of Sparkling Rose (basically unofficial champagne a.k.a. sparkling white wine). He said he had an award winning organic vineyard and was looking for a £60,000 investment for 20% of his "vineyard experience business" (say again!), Pebblebed Partner Vineyards.

He then proceeded to have a major meltdown for what seemed like at least a good minute! He was so nervous, I honestly didn't think he would make it! As usual, the Dragons were not sympathetic!

Luckily for him, he managed to get it back together again and did quite well. He wanted money to buy more land for selling his £20 per bottle sparkling wine and for promotions. He offered the Dragons a drink but James Caan quickly withdrew because he doesn't invest in this type of venture on religious grounds (alcohol related products).

The venture is basically this: for £9,500 the customer gets 60 bottles per year for 10 years. You also get 250 vines (quarter of an acre worth) that you can tend to and you get to consume it with food on location in the cellar, inviting friends along etc. Hence, the "experience".

Duncan grilled him and discovered that the product is made the same way as champagne and that the scheme starts to make money straight away, even at plantation time. Bowen held himself up during this exchange.

Deborah then wanted to know when she would get her money back. I think that she thought that all the money in year one went on costs. Duncan grew frustrated with her and leapt to help Bowen make his point. This was quite hilarious because Deborah didn't like this!

I can't blame her because his delivery was poor. She just got annoyed though and Duncan was smiling, maybe sensing an opportunity here. Duncan then demonstrated that after using the Dragon's money to set up the venture, the money should get returned to them in year one and he also has a stake in the land. On that basis, he wanted in but wanted 40%.

Maybe Deborah thought that was too good to be true, it's not often that a business has such good margins that the investment can be returned almost straight away so I don't blame her.

Deborah then declared herself out because she didn't like the long time horizon on the business model. I noticed Duncan almost roll his eyes at this point. Probably, he reckoned that Deborah still didn't understand it and what she said might have been an excuse. If this was what he was thinking, I'd be inclined to agree!

Peter wasn't convinced of a serious return and declared himself out. Theo said the model didn't attract him either. My personal opinion is that the Dragons weren't comfortable with what they had heard so didn't want to risk going with this venture. They should have at least been honest because, frankly, you could see right through them!

So that was that and the deal was for 40% with Duncan for the £60,000.

My Verdict
I think it was an investment that made good financial sense but I find it hard to believe that the return can be made. The problem with this type of business is that it is like a membership site or club. You need to get enough people to commit and to commit their money before they go ahead. Mind you, knowing the Dragons, I'm sure Duncan will have this written into any contract or he won't invest a penny!

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