Inside Dragon’s Den:
Part 2 - Entrepreneurs on the show
Cool Companies magazine 2008 Vol.3 Issue 1
By Claudia Sammer, Founder and Editor of Cool Companies magazine
What do Canadian entrepreneurs think of Dragon’s Den? Cool Companies magazine found 3 different perspectives. This is Part 2 of the article in which Cool Companies magazine interviewed 2 entreprenuers that appeared in the Season II from the companies *atomic and Banana Guard.
Jessica Bohrson, co-founder of *atomic
Jessica Bohrson and her brother, Russell Bohrson, are the co-founders of *atomic
(atomicexperience.com), a Calgary-based tea shop specializing in tea-infused beverages and toasted sub sandwiches. They appeared on Season II of Dragon’s Den and accepted an offer from the Dragons.
COOL: Why did you go on Dragon’s Den?
JESSICA BOHRSON: We have just one store right now and were looking to expand. We thought Dragon’s Den might really help us do that. It’s one thing to run one shop but it’s a whole different ballgame when you got more.
COOL: Did you talk to other angel investors before?
BOHRSON: We never approached any before going on Dragon’s Den. It was something we honestly never really thought about. It is just me and my brother, so it’s a case of not having the resources to expand with just the two of us. So we needed help. Both of us work in the store everyday. If we could have more employees here to help out, then basically we could work on the expansion ourselves.
COOL: What did the Dragons offer you?
BOHRSON: 50.1% {equity in *atomic} at $120,000.
COOL: But that’s giving away control of your business. Why would you do that?
BOHRSON: It was a tough call. We went in and, honestly in our minds before going into the Den, no more than 40%. We went in offering 25% for $120,000, knowing that we would have to negotiate. We really were not prepared for it {50.1%} and we did not want to do that. But, at the same time, we thought, We would rather have a smaller piece of something that’s really big than the whole piece of something that may never become big. And, I honestly think that with their systems and their know-how, *atomic will become much, much bigger than we could probably have done with it on our own.
COOL: Why did you take this particular deal?
BOHRSON: It was pretty exciting. It was a bidding war between them. And at one point 3 of the Dragons offered us $225,000 for 51% interest. However, we took the third offer with all 5 Dragons for 50.1% because Arlene [Dickinson] and Kevin [O’Leary] were also involved. For me it was critical that Arlene be involved. I had never met her before this, but I know of her brilliant mind and I honestly wanted her to be a part of *atomic. I know Jim has the experience with restaurants, Laurence with retail and Robert with technology. And the thought of having someone like Kevin there too—he doesn’t usually want to be part of them…So then at that point we said, “How about we do the 50.1% with all 5 of you but we also do the $250,000”. And that was when they all started saying, “Don’t get greedy. That offer is not on the table anymore. That offer’s gone.”
COOL: What do you think of their response?
BOHRSON: When I watch it for other people I think, Don’t be crazy. Don’t do it. Don’t do it. Don’t do it. But when it was us, we realized we were going to do it. The Dragons are millionaires and billionaires. When I hear them say, “Don’t be greedy,” I’m thinking, You can afford anything you want. And at the same time I look at this and think, That’s how they become billionaires. It is the way they do things. And honestly, if they can help us in that way, then I’m fine with it.
I know that it’s hard to understand because I know that we would have never taken this deal if you would have told me about it outside. But when you’re in there, it’s the excitement of it. You’re standing in front of 5 of them and you’re expecting them to shoot you down, and then when one of them starts going for it and they’re bidding back and forth with each other, it’s exciting. You’re so caught up in the moment. You’re saying, “Let’s do it. Let’s go for it.” But, it is a loss of control {giving up 50.1%} and we worry about them ganging up on us and making us do something we didn’t want to do with the business. But, we’re fairly trusting of people and we have to just go with our guts and assume that they’re going to be good people.
COOL: Do you have any regrets?
BOHRSON: No. No. No. We are really happy with how it went. Obviously, it’s not the money. I believe that these guys are good for their word and they will help us in any way they can.
David Agulnik, co-founder of Banana Guard
Banana Guard (bananaguard.com) is a device to protect bananas from being bruised and squashed in a lunch bag. Its co-founders are 3 emergency room doctors of Vancouver, B.C., David Agulnik, Amin Sajan and Sunil Mangal. They appeared on season II of Dragon’s Den and turned down an offer.
COOL: Why did you need an investor?
DAVID AGULNIK: We really debated that point. For us, getting capital was not really the issue. Yes, publicity was a factor. Compared to some of the other products, we have a relatively established brand and product out there that’s in stores and certainly this was going to be good exposure for our product.
We knew that the Dragons have, you know, a tremendous amount of experience and certainly if we could bring them onboard to our company that was a big motivation for us as well. We really felt that we were having trouble getting into the U.S. market and really thought that having them, as part of the company, would get us to the next step.
COOL: Why are you having trouble getting into the U.S. market?
AGULNIK: We don’t quite know. We are making small strides and we have a plan. We have done some publicity in the U.S., it’s going to be in some big catalogs across the U.S. I’m not sure if it’s because if it’s such a unique looking product that some people are a little timid.
COOL: How many units have you sold elsewhere?
AGULNIK:Oh we’ve sold 700,000, mostly in Europe, mostly in Sweden and the U.K. They love the design. People will look at it, laugh at it but then realize that it’s actually quite functional. And, once they start using it, word of mouth just spreads it. We spent zero money on advertising in Europe, and they’re our main customer. It’s been sort of a viral type of advertising.
COOL: How did you sell 700,000 units?
AGULNIK:We wrote to The Toronto Star, then other papers picked it up. Oh yeah, blogs helped too. My wife’s brother-in-law is in the Netherlands and wrote it in his blog, and he’s a well known blogger and sent it to his friends who are also well-known bloggers, and within a few days our web traffic went through the roof. We had 100,000 hits. Then we heard from distributors and catalog stores in Europe. 80% of our product is sold this way now.
COOL: What have you learnt about being an entrepreneur in business already?
AGULNIK:We have learnt to trust ourselves. At times it’s important to get outside advice, but you really got to know your product inside and out. Don’t listen to what other people are saying. It sounds hokey, but you know I don’t think we would have made it this far if we would have listened to half the people that didn’t get what this was about.
But then the other one is, don’t be shy about getting the proper advice, as well. I think if we would have sought the advice of our lawyer earlier on, it would—patents, contracts, personnel, I think that would have saved us a lot of money.
COOL: Why did you turn down the Dragon’s offer?
AGULNIK: What happened was they wanted too much [equity]. It wasn’t a deal we wanted to take. But, that’s their job. That’s how they make money. They want control. And, I think that may be a flaw with the show. That’s the most expensive money you will ever borrow.
COOL: If you could do it again, is there anything you would change?
AGULNIK: I would try not to be so nervous. I have a new appreciation for reality TV. It was stressful. You were put on the spot and grilled. I don’t think we would change very much.
COOL: What is the magic the Dragons offer?
AGULNIK: These are multi-millionaires with companies all over the world and contacts all over the world. It’s who you know. I think with the show if they have stake in your company, they would use the best of their ability to make money.
COOL: What benefit did you get from being on Dragon’s Den?
AGULNIK:There was a small increase in orders [from consumers] and a few new retailers who bought the product for their stores. We also had several offers of assistance in trying to get the product into the U.S.
What do Canadian entrepreneurs think of Dragon’s Den? Cool Companies magazine found 3 different perspectives. Read the other 2:
Part 1: Introduction to Cool Companies’ article Inside Dragon’s Den
Part 2: Entrepreneurs on the show (above content)
Part 3: Interview with a Dragon: Arlene Dickinson
Part 4: Opinions of experienced entrepreneurs
