Okay South Africa, Dragons’ Den is here. “In the Den, sometimes dreams are made and sometimes hopes are dashed,” said show host Xolani Gwala as he introduced the audience to the first episode of SA’s version of the popular UK pitching show.
No ad to show here.
The rules of the Den are simple: entrepreneurs have three minutes to pitch and the Dragons interrogate them. They have to get the full amount requested or leave empty handed. Tough crowd, no? We have already met the Dragons and we have told you why entering the show is at your own peril. But with these pieces, which will publish for the next 13 weeks, the duration of the show’s first season, we will tell about whose dreams were made and whose hopes were dashed. So get ready.
Too polished and MBA problems
The first entrepreneur to face the Dragons was Mmachidi Thobejane from Leaner Greener Fleet — a renewable energy and fleet tracking and management company that is entirely owned by black-women. Thobejane gave a well-rehearsed pitch asking for R1-million in return for five percent equity in the business valuing it at R20-million.
“To be honest, I think you are too polished,” said Yola and Gyft co-founder Vinny Lingham.
The company currently pulls through revenues of around R120 000 from consulting. The bio-diesel it wants funding hasn’t actually been developed or sold. She wants funding for the biodiesel. She is using her money, money from current business and dragon money, still around 80% of the funding is still needed. She argues her MBA can help her make this happen.
“I am not sure about MBAers,” commented Creative Counsel co-founder and CEO Gil Oved.
According to the Dragons, the startup is over-valued, giving value for investment. Hope dashed, all Dragons decline to invest.
The nervous pitchers and the unprepared entrepreneurs
Meet the digital trolley guys, Tlou and Calvin Ledwaba, who pitched for R3.7-million in return for 35% stake in the product. The idea is to offer and easy and effective way of shopping.
It’s pretty simple really: a customer walks into the store and uploads their grocery list to the device. Once that’s done, the device rearranges the list for optimum shopping based on temperature.
The Dragons called the idea backward and taking something that exists for free and making it hard and bulking. Hopes were, once again, dashed.
Then came the popcorn flavouring machine inventor Hannes Lombard, who built his makeshift product the week of the pitch and asked for R1-million in return for 10% equity.
The Dragons were not impressed. “You’re taking the fun out of popcorn,” was the killer quote.
Keeping with the food theme, the next entrepreneur to enter the den was chocolate guy Dylan Jonson. He makes designer chocolates and asked R500 000 investment for 10% equity at a valuation R5-million. The Dragons loved his product, but Jonson was just all over the place. He actually got an offer and he rejected it because it was for 50% of his business and that was just not happening.
SleepQ
By the time Skhumbuzo Sithole from SleepQ came out to pitch, it was starting to feel like South Africa’s first season of Dragons’ Den would see the lowest amount invested anywhere around the world.
Essentially a mattress retail outlet, the businesses has already sold 180 mattresses but it too failed to attract investment. The Dragons were unwilling to invest in SleepQ, largely because it has so much established competition.
Finally success!
The final entrepreneur to pitch to the Dragons was Lucky Moabi, who owns a hydraulic cylinder repair business. He pitched to receive R500 000 in funding for 40% equity for his company, which works very closely with the mining sector. He needs machinery to take everything in-house. Polo Leteka Radebe stepped up and invested the full amount.
Radebe is CEO of business advisory group Identity Partners and Director of South African Venture Capital Association. Interestingly she was his first choice of investor.
