Christopher V. Flett

There are two shows that every business owner and would-be investor needs to watch. Dragon’s Den and Shark Tank. Watch them, record them, and study them. In the meantime, here’s the highlights.

Pitch #1: Balmshell

Burn rate: the rate at which a company goes through money. This is different from cash flow. Burn rate adds up all the cost of doing business and in this case, they are at $30,000 per month. That means with the $250,000 they are asking for, if no new sales came in, they would survive for 8 months.

Non-diluted preference share: means that no matter who else comes into the deal, the ownership percentage doesn’t change. This is a power move for a capitalist because it is a ‘fuck or walk’ deal. You either perform or you lose the company to your investor(s).

Best quote by Kevin: “Poo-poo happens, but it doesn’t happen to me.”

Flett Commentary: Their counter offer was really crazy to ask for. Too many big players already in this space. Tough business to get into. Plus, identical twins spook me.

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Pitch #2: Land of Anne

Nothing to be learned other than gimmicks are tough to build sustainable models around.

Best quote by Kevin: “Let’s get together in 20 years when this land is worth something.”

Flett Commentary: 50% equity for $85,000; this guy is like every maritimer I’ve ever met. The deed thing is interesting. The $9.95 is a good price point. He needs to partner with tour companies, the local economic development agencies, have hotels. motels, B&Bs and other groups either sell or include in their packages. Other than that, too tough.

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Pitch #2: Soccer Tactics World

How the hell does a guy with duct tape over his eyes design games? He’s in the dark.

Best quotes by Kevin: “Your worst investments are in your family.” TRUE “Go home and get a bottle of wine, look at the game, set the game on fire, drink the bottle of wine.”

Flett Commentary: He’s invested $150,000, he has made $200,000 over three years. Basically $16,000 per year. Arlene schooled him. Me likey. Dude calls Kevin a liar. Then the dragons turn on him. The guy was a sore loser, with a special focus on loser.

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Pitch #3: Freeze & Snip

The dad was too nervous. He developed a tool that opens freezies. That’s because there is nothing else to open them with (except every frigging sharp thing in your kitchen). He quit his job for a one-product company. Bad, bad idea. $4,000 in sales (barf). He’s into it for $250,000.00 They think the company is worth $500,000.00 The guy leveraged his house, line of credit, and savings to get the company going without orders. BAD IDEA. His poor wife knows she’s in the shit. You can see it on her face.

Flett Commentary: Arlene had a great idea. License the mold to a freezie company. That makes sense. The guy is going out wondering how to sell it. The wife is wondering how easy it is to get a divorce.

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Pitch #4: The doubler

He brought a stuffed animal to demo his bike seat. Very weird. Not much to say other than it amused Arlene.

Flett Commentary: Strange how there aren’t a lot of big ideas coming out of the Pas, Manitoba? Eh?

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Pitch #5: Permanent Canadian Flag

A tin flag that lasts forever.

Best quotes by Kevin: “How many have you sold?” Woman: “Can I finish first?” Kevin: “No…”

Flett Commentary: She had a nice customized pitch, but the idea sucks.

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Pitch #6: Hot Sauce

Hot sauces are big market that people underestimate. Could be a good business, but again, high entry point and lots of marketing dollars required.

Flett Commentary: Didn’t see enough to comment.

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Pitch #7: Modrobes (Vancouver company)

Best quotes by Kevin: “How did you take ten million to zero?You’re starting at zero, you are worth nothing right now. Zero revenue is zero revenue.”

Flett Commentary: Bad presenter. If you have to start over, just walk out. As soon as the guy brings up that he went bankrupt, he falters. If you go bankrupt, own it. It happens in business. The guy is saying the right things (“I want to spend your money like it is my money…tight.) He was a bit flippant about turning Jim down. He is passionate, but I don’t think I would put money his way. One good thing that Robert said that capitalists look at is “if the company goes on the rocks, I couldn’t step in and take the reigns.” Bret gives him $100K cash, $100K operating loan for 25%

Here’s the catch. By him offering an operating line, the company is guaranteeing repayment. If the owner doesn’t meet the repayment schedule, Bret can step in and take the whole company. Dangerous move for the existing owner. He better do his thing or Bret will eat his lunch.