Podcast Transcript: Inside a Dragons' Den audition
If you’ve seen the popular television show The Dragons’ Den, you know that it’s a program that features a no-nonsense group of business tycoons looking to invest in promising Canadian companies.
But convincing someone to give you money is never easy, especially the dragons.
Today, we’re following a company called Green Over Grey on their quest for dragon financing. They made their pitch to producers of The Dragons’ Den who were holding auditions at an environmental industries trade fair in Vancouver.
Stay tuned to hear the pitch and to find out if they made it on the show. What happened might surprise you.
I’m Michael Mancini, Editor-in-Chief of CanadExport, the official e-magazine of the Canadian Trade Commissioner Service – Canada’s most comprehensive network of international business professionals.
Before we get to the company’s audition, I spoke with Molly Duignan, one of the Dragons’ Den producers. You’ll hear her later grilling the company. Here she is talking about what the Dragons are looking for.
Molly Duignan: There are no hard and fast rules. We’re looking for the best and brightest. We’re looking for unique innovative ideas whether it’s a start-up or whether it’s something that’s already making a ton of money. You know, the Dragons want to invest in the next best thing and we’re looking for it. So you never know what you’re going to get.
Michael Mancini: So what are some mistakes companies make?
Molly Duignan: I think the biggest thing that we have to remind people of constantly, and we don’t mean to make it sound theatrical, but it is a television show. Yes, it’s a business investment show but the biggest fault our people have is making a boardroom presentation. I’ve been telling people over and over again our audience is 8 to 88. How is the school kid at home going to understand? How is your grandma in northern Alberta going to understand it? Sometimes the Dragons might be able to get into the nitty-gritty but overall the public needs to understand what it is, why it is great and are they in or are they out. It’s that simple.
Michael Mancini: So what kind of financial criteria? Are there big red flags in terms of a company’s ask and what the Dragons are looking for?
Molly Duignan: Well, it’s a formula. And asking for investment is a formula based on the value of your company. So everyone has a million-dollar business, right. They’ll say “I’m looking for $100,000 for 10% of my company.” We say, “so you’re a million-dollar company?” They say, “not yet but we will be.” You know, people are always looking to invest in potential, but to tell you the truth and even though that’s a valid pitching point, it goes beyond potential. What are you worth right now? That’s what the Dragons want to know. What are you worth today? What are you going to be worth tomorrow and where can they invest?
So my job is to challenge them. Like we always say, if you think I’m bad wait until you meet the Dragons. I ask them all the questions that I expect the Dragons will ask them. This is their dress rehearsal, it’s an audition, you know, so I say if you can’t answer my questions, how are you going to answer the Dragons’ questions because we get a lot of “I don’t know, I haven’t thought about it”, or “We’re not there yet”. Maybe you’re not ready then.
Michael Mancini: That was Molly Duignan, a Dragons’ Den producer. Well it sounds like a tough road to making it on the show. Let’s go ahead and listen to the two principals of Green Over Grey making their pitch to Molly and another producer.
Michael Weinmaster: Hello. My name is Mike Weinmaster and this is my colleague, Patrick Poiraud. And the company that we created is called the Green Over Grey, Living Walls and Design.
Patrick Poiraud: Basically what we do is that we create vertical gardens so we’re able to cover the whole side of a building with gardens. So it can be either internal or external.
Michael Weinmaster: And basically we would like to be on the show because we would like some funding to continue promoting our product and educating people...
Producers: How much money?
Michael Weinmaster: $250,000.
Producers: For how much?
Patrick Poiraud: For 10% equity.
Producers: So you’re a $2-million company? You’re a $2.5-million company?
Patrick Poiraud: Not yet but we have huge potential.
Producers: How much does it cost to produce... and how much do you make?
Michael Weinmaster: Well, it works out to be about $100 to $130 per square foot.
Producers: For a customer?
Michael Weinmaster: For a customer, yes. That’s including the plans and the design, consultation, installation.
Producers: And how far are you reaching? Like where are you guys located? Here in Vancouver?
Michael Weinmaster: We’re Vancouver-based.
Producers: And who are your clients? Give me examples of some of your clients and how far you can go.
Michael Weinmaster: Well, we’ve done a number of residential projects. Also we just completed a project at ING Direct Bank which is on the corner of Howe and West Pender. They wanted to green up their image, so we put in two vertical gardens there.
Producers: And so give me an example of how big that wall is and how much did ING Direct pay you?
Michael Weinmaster: The first wall is about 100 square feet, the other one is about 80 square feet. And they paid us $15,000 for both.
Producers: Okay. Is there a way of expanding or would the Dragons buy into a sort of city-based small business or do you guys have a dream of...
Michael Weinmaster: We have world domination in mind.
Producers: Oh, really? Okay.
Michael Weinmaster: No, I mean first we want to start in Canada and then expand to the U.S. and then internationally.
Producers: And these walls can exist in snowy, frozen Prairie wastelands, no offense to any Prairie wasteland dwellers, but even where I live, dark, dreary Toronto for most of the year I can having a living wall?
Michael Weinmaster: Yes. I mean the beauty of our system is that we can incorporate thousands of different plants, and so if we’re going to do it in a really cold climate we’re going to use zone 3 plants or zone 4 – something that can withstand the cold winters.
Producers: How do you describe what you do for a living?
Patrick Poiraud: Well, we describe ourselves as design consultants and we say what we do are living works of art. So we want to create public art and green up the cities.
Producers: So give me an idea of your margins.
Patrick Poiraud: Of course. Well, margins range from 30 to 40%.
Producers: Okay. And how long have you guys been around as a company?
Michael Weinmaster: We incorporated in 2008 but this took years of research. We travelled around the world, visiting tropical rain forests like in Malaysia, Papua New Guinea, Brazil and we really studied plants that grow naturally vertically without soil such as epiphytes and hemi-epiphytes.
Producers: Okay. Well, here’s what I like about your pitch. It’s different. I think it’s something new and it’s exciting, as you say. But I’m a little bit worried about how you would be able to present it and how people at home would understand exactly what you’re talking about. Is this something a home owner would ever buy or is it always just going to be ING and big corporate spaces?
Patrick Poiraud: We actually also have requests from the residential market. At the trade show we had requests from people from all around the world who see our product and say they would like to integrate that into their own personal space.
Producers: So you would be able to commercialize it for regular folks as well as do the corporate thing.
Patrick Poiraud: Of course, yes.
Producers: Okay. Good. Very good. It’s a really good pitch.
Michael Mancini: Well, they seemed to like it. Now that was a few weeks ago. Let’s now talk to Patrick Poiraud, who of course you just heard from Green Over Grey, to find out if his company made it through.
Hi Patrick. It’s Michael Mancini from CanadExport. I’m calling about your Dragons’ Den audition. So they seemed to really like your pitch. Did you make it to the show?
Patrick Poiraud: Yes, we made it into the show and we were accepted and contacted by the producers a few times, but we decided not to participate this year.
Michael Mancini: Oh.
Patrick Poiraud: There were two main reasons for that.
Michael Mancini: Okay.
Patrick Poiraud: It’s a little bit surprising but first of all the main reason is that we are still at an early stage of the company and we realized that we didn’t want an investor to take some equity at this stage of the company and we didn’t really need financing, so that’s the main reason. And the other reason is that while it’s a show which is broadcast on national television and has a large audience and it would be interesting to us for PR reasons, we realized that it was not really fitting what we wanted to communicate. We did not want to focus so much on the financials…on the hard facts.
The show is really focusing I think on the drama and the intensity of the interactions between the potential investors and the entrepreneurs. Basically you would have a short presentation about the product but the main focus of the show is not about the product. The main focus of the show is about the financials and how the investors can make money on these products. That’s not something that we really want to communicate. We really take an artistic approach to what we do and that’s the kind of discussion we want to have if we wanted to go on national television to explain what our approach is to creating our gardens.
Michael Mancini: Well, that’s really interesting. So why is your company not ready to give up equity at this point?
Patrick Poiraud: Well first of all, we don’t really need additional funding at this stage. That’s something which might come when we continue to develop, so that’s the first thing. So to have an investor taking a majority stake, a very large stake at this stage of the company, we felt that was not right because we have a lot of potential to expand before approaching some potential investors. We were not ready to approach investors at this stage when we have not been able to express the full potential of the company.
Michael Mancini: Right. So now after this great pitch that I saw, when did you realize that you know, wait a minute, this is not right for us right now?
Patrick Poiraud: It was a relatively hard decision to make and we have been consulting with different entrepreneurs, with family, with friends, with ourselves of course and it took us a few days to come to this decision and so it a hard decision to make but we feel that we made the right decision.
Michael Mancini: What would you say that you learned from this entire experience?
Patrick Poiraud: Well, it’s always a good experience, you know, to pitch and to reach potential investors and to do presentations about your company. So it was positive and you learn from that. Then I think it was very spontaneous. We didn’t know that Dragons Den was going to be present at trade shows so our pitch was very spontaneous and not really prepared. So, well, one of the first things we learned is that of course you need to prepare your pitch better but it went very well. As I said, we were accepted on the show. But of course you need a lot of preparation when you’re going to meet investors.
Michael Mancini: Well, listen, best of luck. I really appreciate you taking some time today.
Patrick Poiraud: Okay. Thank you, Michael.
Michael Mancini: Well that’s all for this podcast edition of CanadExport. Stay tuned for our next podcast when we follow another Canadian firm’s quest for financing on the Dragons' Den.
For Canadian companies looking for more advice on making a pitch, whether it’s for venture capital or if you are looking for an angel investor, just go to canadexport.gc.ca. You can find videos, articles and other audio podcasts on these and other topics.
To find out how the Trade Commissioner Service can help you, don’t forget to go to www.tradecommissioner.gc.ca.
I’m Michael Mancini, signing off for now.
To download our other episodes, just go to www.canadexport.gc.ca or go to iTunes and use the searchword “CanadExport.”
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