The entrepreneurial duo of Jake Hayman and Joe Kenyon took their Instagram framing business on Dragons’ Den last month hoping to raise £60,000 for a 20 per cent stake in the business. The result was not an investment, but a job offer from Jessops owner Peter Jones and some cracking exposure for their venture.
Fast-forward a few days and the pair had become one of a growing number of businesses which had used crowdfunding as a way to secure some quick early capital and group of customers. It took only a little more than the time Hayman and Kenyon were in the den to raise £20,000 – and with it a thousand-odd brand ambassadors and backers.
This is not the first time that a failed Dragons’ Den pitch has turned to crowdfunding. Captive Media, which has devised a ‘play as you pee’ video games offering installed onto urinals, raised £250,000 on crowdfunding platform SyndicateRoom to go with capital secured the previous year.
Captive Media is making it more fun to go to the toilet, and hit the mark
We have also seen other failed pitches go on to raise venture capital. The best example is Trunki, the business that produces child-friendly luggage but was savaged by Theo Paphitis when he ripped the towing cord off of one of the products. Not that the founders will be losing much sleep over that after raising £3.92 million from the Business Growth Fund in April 2013.
As a prime time BBC2 show on a Sunday evening, a time when most of us are dreading Monday morning and zoning out to a little TV, businesses successful in getting onto Dragons’ Den are afforded exposure even the most carefully assembled and costly marketing plan would struggle to do.
It is this kind of PR that is key to getting some early traction going in a crowdfunding pitch and then reaching the desired total. Like Dragons’ Den, crowdfunding pitches must make target otherwise no money can be banked at all.
And with ever more casual investors taking to crowdfunding platforms looking to find better returns from savings (watch this space to see if there will actually be some) and back their favourite brands, it’s fair to say that the fundraising medium offers a much higher chance of success that pitching to the likes of Duncan Bannatyne, Peter Jones and Deborah Meaden.
More on Dragons’ Den:
- Dragons’ Den failure SendmyBag packages new funding deal
- Kelly Hoppen replaces Hilary Devey on Dragons’ Den
- Former Dragons’ Den pitcher founds website
It’s also fair to say that the Dragons have let a fair amount of good businesses get away from them after promise was not recognised. Shaun Pulfrey’s Tangle Teezer brand was rejected but has gone on to be stocked in countries around the world and be named in 19th place as part of the 2013 Sunday Times Fast Track 100. It’s also one of the poster businesses for the government’s Business is GREAT Britain campaign alongside the likes of Brompton Bikes.
Tangle Teezer founder Shaun Pulfrey has grown his business by exporting
So, what can we draw from all of this. Dragons’ Den is now in its 12th series, with the same amount of investors taking part, and shows no signs of loosing public popularity. At the same time we are in the midst of a massive crowdfunding surge, financially powering a number of businesses which would previously have been turned down for bank debt or failed to excite angel investors enough.
If the two can work in tandem, as let’s face it the Dragons do not have nearly enough money to invest in every or most of the businesses put in front of them, then long may it continue. Public exposure is pivotal to growing an early brand and raising money via crowdfunding.