One of the biggest setbacks Sheffield-born Sam Marley faced when starting his business was being turned down by investors.
It’s a familiar stories for entrepreneurs; you’re in a coffee shop or a boardroom, investor deck ready, sharpest shirt on, shoes polished – ready to wow the investor who’s given you an opportunity to pitch to them about your company that’s going to change the world.
A ten-minute presentation, 30 minutes of questions and answers, and you walk out of the door cheque in hand. Sound easy?
That’s what Marley thought as he and his co-founders went out to raise their seed round for a location-based photo-sharing app, Blurr. ‘We didn’t have revenue, or any plans for it, but we had scaled our app to multiple colleges across the US and had that imperative word: traction,’ Marley says.
“The investor is giving you the money, not your company”
However, as he did the rounds of meetings and presentations he quickly found his view wasn’t shared. ‘We were 21-year-old first-time founders still in university, with a cool product, an amazing story, unique vision and irreplaceable energy. Believe it or not, that wasn’t everyones cup of tea.’
Marley became disheartened at investors on the other side of the table who didn’t match his energy. ‘We started to question ourselves, tone back our unique presentation and even listen to the disinterested investors’ advice about how to make our deck and company more ‘standard’. Throughout our whole journey, listening to that advice would have been the worst mistake.’
Focusing on a USP
Marley learnt that his team needed to double down on what made them unique. ‘The issue we had was finding the right investors who loved us and our company for who we are and where we are going, not who they want us to be.’
That required greater patience, more self-awareness and a ‘bloody thick skin’.
Marley developed a two-meeting rule, where after two meetings he would ask the investor to make a clear decision about next steps. ‘Its much easier to cut through the noise about who is serious and who we wanted to have a piece of our company.
‘Taking this new approach helped incredibly, and surely but eventually had a team of incredibly helpful, thoughtful and excited investors who couldn’t wait to give us their money to make our vision a reality.’
So much of getting investment is networking your way to the right doors that fit your company and personality, Marley adds. ‘At the end of the day, the investor is giving you the money, not your company. They believe in you to make it happen – and that’s why if there isn’t a personality fit its never going to happen.
‘Be patient, know yourself and take every piece of advice with a grain of salt.’
Taming the Dragons
LatestFreeStuff is a website focused on delivering up-to-the-minute special offers and free products to the public.
Like Marley, founder Deepak Tailor launched the business as a student. Perennially broke and in need of all the freebies he could get his hands on, Taylor would spend half his spare time looking online for special offers. ‘It was time-consuming because there was no central hub to visit. That’s when it occurred to me that I probably wasn’t the only person doing this and that I could create a business based upon something I was doing anyway,’ he says.
Tailor was looking for a £50,000 investment when he went into Dragons’ Den, which was earmarked for sales and marketing efforts to attract more brands to use the platform. ‘We had also planned to use the money to improve our website and upgrade some of our tech to enhance our overall experience for users.’
The investor who stood out in the Den was Deborah Meaden, because she came closest to the valuation Tailor was seeking. ‘All the investors would have offered different opportunities to support our growth, as we are quite a mainstream business with the potential to work with almost any B2B or B2C business and attract a diverse range of customers,’ he explains.
‘The pitch was nerve-wracking and the most difficult thing I’ve ever been through,’ he adds. It took over three months of planning in terms of learning every single aspect of the business; everything from the sales to the finance. Tailor spent hours and hours going through spreadsheets to make sure that he knew every angle of the business, so that if the investors asked anything he always had an answer to it.
“On a personal level, the whole Dragons’ Den experience really helped to boost my confidence”
He spent almost three hours in the Den speaking to the Dragons. ‘Things went quite smoothly and they were impressed with the traction we had, and liked that we had not spent anything on advertising or marketing. They all seemed interested in the company.’
As things went on, Peter Jones pulled out and said that he thought the company could be easily copied. Nick Jenkins also pulled out, saying that he thought the company had reached its maximum user growth and that he didn’t know how to help grow it any faster.
The other Dragons liked the company though, and offers came from three of them and, after some consideration, Tailor accepted Deborah Meaden’s offer on the show.
However, as often happens in the Den, the deal didn’t go through.
A confidence boost
‘On a personal level, the whole Dragons’ Den experience really helped to boost my confidence,’ Tailor says. ‘Walking into such a high-pressure situation really is a very difficult thing to do; when you walk into the room you feel dazzled by what seems like hundreds of lights, while the cameras and film crew appear to be constantly staring at you.
‘It really makes it difficult to keep your composure in a very uncomfortable environment. So, from a personal point of view, it’s helped me to overcome my fear of public speaking, as anything I do in the future will not even come close to what happened in the Den.’
Despite the setback, Tailor says the company has gone from strength to strength since Dragons Den, attracting over 500,000 monthly visitors with 600,000 email database members. Its social media presence has continued to grow, and Tailor says the company now has the potential to reach up to 300,000 extra people every month.
‘The future is bright as we continue to attract new brands, build on our company image and look to take the company into the US next month.’
It goes to show that, far from being a hindrance to a company’s fortunes, failing to achieve investment can be a precursor to business growth and success.