Break out the champagne, bring on the marching band and shout it from the rooftops – Duncan Bannatyne has finally made an investment! That week off must have helped him remember what he’s doing on an Investment show. He still looked miserable as sin though, and should still be dropped.

The first victims to fall at the dragons feet this week were David Field and Ali Kord, with their “Virtual Puppet” – They obviously thought the dragons would be won over by one of their characters giving the pitch for a £200,000 investment for 30%.

But won over they were not – The dragons soon drilled down to the details, and when it was established that each “puppet” costs £10,000 to make and a resale price of £20,000, Peter Jones asked the obvious question: “Why on earth would anyone spend £20,000 on this?”

The answer was just as simple – No-one has. David and Ali are yet to sell a single one. As far as I can see, the only use for a product like this is as a sales gimmick – and who needs a £20,000 Gorilla costume?

James Halliburton was next in, with his flotation device, Water Buoy. Designed to inflate when in contact with water, it can be attached to items that can then be rescued if they fall overboard on a boat. James delivered a very slick pitch, which for one horrible moment looked like it was going to fall apart when demonstrating that it could lift a 1Kg weight – for a heart-in-mouth moment it looked like the device wasn’t going to activate. But it eventually did, and successfully lifted the 1Kg weight – to everyone’s relief it appeared.

James was looking for £200,000 for a 10% stake in the company (Two magic millions!), and when asked by James Caan to justify this valuation, he delivered the usual “well, it’s based on the potential…” grrr…. £2m for a business that hasn’t sold a single product – when are people going to realise the dragons aren’t stupid and be less blimkered about their valuations?

One area of the “potential” that pricked the dragons ears up was the news that James felt the product could be developed into a lifesaving version that could lift much heavier items (like people and animals). This prompted Theo to make James an offer of the full £200,000, but for 25%. James came in next, and also offered the full amount, but for a slightly lower 22.5% stake. The only remaining dragon (I think Duncan felt it wasn’t a business or something) left in was Peter Jones, who offered to split the investment with Theo, so James would get 2 dragons for the price of one.

James was happy to accept this offer, so once again James Caan has missed out on an investment by not fighting his corner and pointing out what he can bring to the table, and unlike Theo, his childrens inheritence stays where it is.

This week’s “quickies” were some twin-peaked golf caps, a football headband (laughingly called Goalband), some flotation device centres, a rediator fan device, and “Bamz” Interactive insoles.

Next up was serial drinks-creator Ann Hemstock, who wanted £150,000 for a 20% share in her latest drink, Cream Cutie. Having sold 2 previous drinks for a total in excess of £500,000, she clearly has a good track record in the industry.

Theo asked the obvious question based on this – Why does she need the money? Ann answered this very well I thought, explaining that the money was received over a period of 10 years, and much of it used to pay off debts.

Unfortunately, one area that let her down badly was the figures. When Peter questioned how she came up with the valuation of £750,000, she replied that “is the figure I want”, and when Duncan asked how much she would hope to sell the receipe to a drinks manufacturer for, she replied with £500,000, which Duncan pointed out would mean a loss for him (assuming he buys 20% for £150,000) – she then upped it to £750,000, and then finally settled on a Magic Million.

Clearly she had massively over-valued this product, and that made it uninvestable for the Dragons. The only was I could see an investment happening at £150,000 was for a 50% stake in all of her future recipes too – Even that is taking a punt, and to be fair Ann’s prbably better off growing organically anyway. Not surprisingly then, all dragons declared themselves out.

The final couple this week were Tony Charles and Shane Lake from online takeaway website Hungry House. They were looking for a £100,000 investment for an 11% stake (WTF?? Way to avoid the magic million guys!).They established that they had taken 15,000 orders in their first year, which equated to a turnover of £24,000. Peter declared himself out quickly, pointing out quite rightly that the idea was very easily copied. Shane rather arrogantly replied “I don’t think so” to which Peter pointed out “I have a team of 40 developers… How long do you think it would take them?” – “Not long” was the sheepish reply.

Theo asked if there were many others doing it – They carefully avoided the fact that there are at least 20 sites doing this, and focussed on their one main competitor, who had launched one month later than them, and had four times the number of restaurants signed up.

Whilst this made Theo’s mind up (he declared himself out, as he would want too much equity), James saw this as proof the model works if the execution is done correctly, and asked for thier projections. These projections seemed as pie-in-the-sky as their takeaways (see, I could be a dragon with put-downs like that!), with turnover jumping from £24,000 to £3.2m in 3 years, and profit going from £0 to £2m.

James could clearly see that the numbers might work, although much more conservatively than this, and offered then half the money (£50,000) for a 25% stake – Clearly happy to take a punt, but also prepared to lose all his money if it doesn’t work out.

With Peter and Theo already out, Deborah Meaden declared herself out, and Evan Davis doing the voiceover said the line any entrepreneur hoping for investment dreads: “All that lies between them and failure is Duncan Bannatyne”.. oh no – Here comes the “witty” final word from Duncan, and off they go down the stairs whilst duncan laughs at his own joke.

But no – This is the final pitch of the show – and they ALWAYS get the investment, don’t they? And sure enough, it appears that Duncan read the script (and no doubt his contract that he has to make at least 1 investment per series) and matched James offer of £50,000 for a 25% stake.

Tony and Shane went away to talk about giving away 50%, and clearly they needed to negotiate the dragons down. They didn’t make a good job of it, leading in with “I don’t suppose you’d consider…”, making it very easy for the dragons to say no. However, James offered them a lifeline: If they hit their Y2 target of £2m turnover, £1m profit (plucked out of the air if ever I saw it), he’d drop back to 20%, and if they hit the Y3 target of £3.2m turnover, £2m profit, he’d drop back to 15%.

As James said this, the camera panned back to Tony and Shane, whose faces had “Oh Sh**, why did we make up those numbers” written all over them – Duncan also agreed to drop on the same agreement, so as long as they weren’t lying about their projections (as if!), they should only end up giving 30% to the dragons. I’d put money on either a) The investment didn’t go ahead, or b) Duncan and James will still own 50% after Y3.

So there you go, Duncan is off the mark – I hope you all Sky Plussed it, as it might never happen again! Let’s see what effect that has on the Series 5 Investment League Table:

1. Theo Paphitis: 3 investments, £325,000
2. Peter Jones: 4 investments, £300,000
3. Deborah Meaden: 3 investments, £110,000
4. James Caan: 2 investments, £110,000
5. Duncan Bannatyne: 1 investment, £50,000

So, that investment’s not enough to lift Duncan off the bottom, and James remains in fourth place, though only behind Deborah Meaden on number of Investments now. Theo and Peter are clearly in a league of their own. Of course, there’s still 4 episodes to go in this series, so still time for it all to change…

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