‘Stupidity or genius’ Dragons’ Den cast astounded after man invested £720,000 of own money

Steven Bartlett says his time in the Den was 'emotional'

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Dragons’ Den offers business owners the chance to pitch to five multimillionaires, and one entrepreneur seized his chance. First to face the Dragons were London-based duo Edward Hancock and Richard Simpson. The pair, who have known each other since they were teenagers, were hopeful to secure investment in their cheese business: Cheese Geek.

The company was hopeful to raise £100,000 for a three percent stake in their business.

Edward shared his hopes of making Cheese Geek into the “dominant brand” in the UK cheese industry and beyond.

The company offers one-off boxes of cheese, as well as its flagship product, a subscription to receive a variety of cheeses regularly through its app.

In the first full year of trading, Cheese Geek turned over £96,000, rising to £280,000 in the second year, and £1.54million in the third year – showing growth.

Serial eco-investor Deborah Meaden, was keen to understand the value in the business.

Richard explained the technology of the business was second-to-none, providing profiles on each cheese, as well as offering a tailored “cheese profile” to each customer based on their preferences.

Deborah, however, expressed concern. While cheeses are popular at present due to sourcing crises from France, this may settle in future, potentially leaving less demand for the business.

Peter Jones was less convinced by the valuation, describing it as “smellier than the cheese”.

Edward explained the figures, adding that he had personally invested £720,000 into the business, a revelation which visibly staggered new Dragon Steven Barlett.

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“How much?!” Steven exclaimed, “Where did you get £720,000 from? Have you got more where that came from?”

Edward said he obtained the money from his career in finance, with an additional £700,000 from investors, but other than that, he did not have any further funds – showing how much faith he had placed in his company.

“That’s either stupidity or genius!” Steven remarked.

Edward continued: “Numbers are my game. I’m not someone that is going to say I’m not a business person. In our fourth year we are expecting £5.6million.”

Peter turned his nose up at the figures, suggesting profitability was too far away, but the pair insisted the business was profitable now, but marginally at only £2,000 earnings before interest, taxes, depreciation, amortisation, and restructuring or rent costs (EBITDAR) – the net profit of a company. 

Steven Barlett was also sceptical, and due to his investment in a similar app for wine, he was keen to understand the risks to the Cheese Geek business.

When the owners struggled to identify any, it left the Dragons unimpressed.

Steven remarked: “It’s really concerning when the entrepreneur doesn’t know what the risks are to the business. They might surprise the investor.”

It seemed to be bad news for the online cheesemongers, with Deborah expressing ethical issues with milk production, and Sara Davies stating the company was not suited to her. 

However, offers did arrive for the Cheese Geeks, firstly from Peter Jones who offered all of the money for 15 percent of the business.

It was matched by Touker Suleyman who also offered all of the money for 15 percent of the business. 

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A counter-offer was put forward by Steven Barlett: all of the money for just 7.5 percent of the business.

He remarked: “I think that’s fair. I’m not going to suck the blood out of you like Peter just did.”

The duo were pleased with all of the offers put forward on the table, thanking the Dragons profusely.

However, in the end, they pushed Steven for a negotiation – five percent of the business, with a guaranteed return on his investment.

Steven replied: “If you can return my money in the next 24 months, then I will drop down to five percent.”

They accepted his offer, making it the first business Steven Barlett invested into as a new Dragon.

A delighted Edward said: “It was scary not accepting Peter’s offer, but I just didn’t make eye contact with him! Steven can bring so much to the business, and he adds value in the areas that we need.”

Dragon’s Den is on BBC One at 8pm on Thursdays.

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