Promising pitch falls apart after shocking revelation | Dragons’ Den


Hello. I’m Melissa Snover,
the head magician and founder of the Magic Candy Factory. Today, I’m looking for an investment
of £80,000 in exchange for 2% of my business. The Magic Candy Factory
is the world’s first and only 3D food printer
to be certified and safe for live public and commercial use. People can write words,
make 3D shapes or even upload photographs to create
their very own sweet selfie. I made a few of you guys, up here. Magic Candy Factory launched
its first printers into the market in 2016, in April. And since then, we’ve deployed
over 100 machines in different retail, travel and entertainment
venues across the globe. But in addition to that,
we are launching a new concept in personalised supplements,
so people will go online and they’ll be able to choose seven
active ingredients from 27 different options across minerals,
vitamins, probiotics, then we will 3D print
them their customised vitamins and send them in the post,
with less inconvenience, less cost and less waste. The future of wellness is 3D,
I hope you’ll agree. And I made you some samples,
and I can show you here. Customised candy, as well as
personalised vitamin supplements, are the offerings
from Melissa Snover. She’s looking for £80,000
in return for a 2% share in her 3D printing business. If I kiss the frog,
I might get a prince, right? You might, you never know.
You never know. A fairy-tale taste test… Actually, it’s very nice. ..but Touker Suleyman wants to go
back to the very beginning of the story. Melissa…
Yes? How did you start with all this? So, I started making candy
about seven, eight years ago, because I’m a vegetarian
and I couldn’t find gummy candy without gelatine that tasted good. And so I came up with my
first consumer brand, Goody Good Stuff. I sold Goody Good Stuff about
two-and-a-half years ago to a large conglomerate. And at the end of that,
one of my biggest frustrations was that you couldn’t make
customised products in a normal factory. So, the Magic Candy Factory
was my vision to allow the consumer to create their own product. And how much did you sell
your company for? Unfortunately, it’s undisclosed. I’m not allowed to say
what we sold it for. Was it in the millions? Yes. And where would I find
this in the UK? We actually leased the printers
to a retail outlet for a period of time. So it was in stores
nationwide for Christmas. Fine. The other machine you’ve got
there is the vitamin machine. Yes. So, I want some vitamins,
I go on your website and I say, “I’m short of iron, I’m short of
this,” it’ll be calculated. “Bing,” it will say, “You need X,
Y, Z, and we’ll put “you on a year’s subscription.” Yes, that’s correct. And then we
will send them in the post. There will be lots of options. So one month will be one price,
three months will be cheaper. A 12-month subscription
will be less. Impressive.
Thank you. Two potential sources
of revenue for Melissa, who’s made a good first
impression on the Dragons. Now, Jenny Campbell wants
to find out exactly what’s brought her to the Den. You’re a successful businesswoman.
Thank you. You had a business and you sold
it for many millions. So, I’m intrigued, first of all,
as to what you want a mere £80,000 for. Why do you need or want a Dragon? So, what I really want
from this experience, and the reason I wanted to come on,
was that I’m about to go into two markets that are not my specialty – so vitamins and supplements
and direct-to-consumer totally digital online business. And so I really would
like to have the expertise of someone who has
more in those areas. OK, so it’s more about the building
blocks for your business, the vitamins business? That’s exactly right, yeah. Funny, that. Sorry. Yeah. Hi, Melissa.
Hi, how are you? Very well, thanks. Vitamins has been my business
for many, many years. Just going with your vitamin
machine at the moment, how long does it take
to produce a pack? Right now, we’re currently
testing at five minutes for one month’s supply. It is still a prototype,
and we do hope to get it down to about three minutes. But for a one-month
personalised vitamin, at the moment, that cost
price is still netting us about a 50% margin. Wow. In terms of customisation,
I see things going there. I don’t know if it is today,
but it definitely is moving towards that direction.
Yeah. Praise for Melissa’s product
from the vitamin king, who appears to share her vision
for the future of supplements. But Touker Suleyman wants to drill
deeper into the mechanics of her business. How much money have you raised to
get this off the ground? The original investment that was put
in from myself and my other shareholder, the other director,
was around about £800,000. And who are the shareholders? Just myself and my business
partner, Bastian Fassin. And how much do you own
of the business? 10%. You own 10%?
Yes. Oh. And who owns the rest?
He does. Is he an active shareholder?
No. He’s a passive shareholder? Yes.
So what does he do? He has his own candy
business based in Germany, which is very old,
about 100 years old. What’s this company called?
He has a lot of responsibility. Katjes. Melissa, surely if he owns
90% of the business… Yeah. ..he should have been here. Well, he didn’t feel
like he needed to be here. Day to day, I run the company
and the entire operation myself. But do you have the
mandate to negotiate? Yes, yes, I do. The revelation that Melissa only
owns a 10% chunk of the business has given the Dragons
something to chew on. And Peter Jones has spotted
something on her candy’s packaging which could further sour
the mood in the Den. So, the product here,
the guy that owns Katjes, is that right?
Yeah. This is his branding. Yes, it is, yeah. And are they in the UK?
They are not in the UK, no. And is this almost like a division
of their company, then? No, I don’t see it that way at all. Why do you use their brand? Their brand’s not known here. In the very beginning,
we called it Magic Candy Factory on its own. And as it started to grow,
we both decided we felt it was a good opportunity to also
raise awareness about Katjes. And at the end of the day…
Hang on, this is all words. So I’m going to break this down,
because I’m good at this. I don’t buy it. The reason why I don’t buy
it is that you’ve got an investor that isn’t here today
and owns 90% of the company, and you’re putting his brand
on a product that he’s got nothing to do with, apparently. Well, he does have something to do
with it, because he made it possible for us to get to market. Where did the money come from? Did he personally put the money in, or did he use his company vehicle
to put the money in? The money is in the business
through the company. Right, OK. You are now a division
of his global operation. Actually, that’s not true,
because all of the major decisions that would happen within the company
require a unanimous agreement between myself and him. It’s still irrelevant, because he
hasn’t personally invested. He is the other person named
on the shareholders’ agreement. It says his name. You are a businesswoman, you know
exactly what you’re doing here. You are a subsidiary,
in the UK, of his business. I really don’t see it that way,
but I understand your point and I take it on board. No, but the facts are true, though,
that’s true. Have you got your shareholders’
agreement here? I do, yeah. One second. So the… Don’t worry, I’ll find it.
You’ll find it, OK. I’ve seen lots of
shareholders’ agreements. You’ve seen lots and lots of
shareholders’ agreements. There we go. Just to be absolutely clear,
this is not an agreement between you and Mr Fassin, this is an agreement
between you and Katjes. That’s actually pretty catastrophic,
as far as I’m concerned. Katjes basically own this business
and they’ve incentivised you, with 10%, to be their manager. I’ve also invested
in the business myself. I know, that’s not an unusual
structure in a private equity type arrangement, and that’s
what we’ve got here. It’s not one I want to sit
as a junior partner in. So I’m really sorry,
Melissa, I’m out. A blow for the entrepreneur,
who has lost her first Dragon. Melissa’s pitch is in
danger of imploding. Is Touker Suleyman sufficiently
enthused by the technology to overlook the contentious German
connection? I think we’re just coming
to a new revolution in 3D printing and just as you’ve thought
about vitamins, there will be something else,
there will be more vitamin machines. We’re at the beginning. I think you’ve done great. Thank you. However, the share
structure concerns me. It’s just complicated. And I’ve got… I want
a simple life at my age. So for that reason I’m not going to
invest, I’m out. Having said that you are
a successful businesswoman, I’m now going to say, actually,
I find your coming into the Den today on the basis of
this proposition very naive. You’ve sold a business, OK? When you sell a business,
you as the owner go in front of the buyers and you sell
that business, but Mr Fassin, he’s not even here. So I’m going to declare myself out. More disappointment for Melissa,
as a second and a third Dragon decline the chance to invest. Does Peter Jones find the notion
of a tie-in with the absentee Willy Wonka any more appealing? I like the idea of 3D printing,
I like this moving forward. But whatever deal can be done,
it’s impossible to get away from the very issue
that control will always exist with the very person
that is actually branding on the back of your product. I’m now going to be an investor
in a subsidiary of a conglomerate, that’s not what I want.
Right. I’m sorry to hear that,
but honestly this is really not the way that it is in real life. No, it is. It is, in real life. So for that reason, sadly, it’s not
for me, and I’m out. Four Dragons have walked
away from the deal. Only supplement supremo
Tej Lalvani now remains. Will his expertise in this
particular market allow him to identify an opportunity
that the others have missed? I need to ask you one question. Yes? Would you go into business
with someone you haven’t met? Without Mr Fassin we would have
never brought…got these two products to market. I know that he is very excited
about the opportunity to work with someone, specifically you,
that is very experienced in vitamins. This is just not how I do business.
Yeah. If he owns 90% of the business
and I’m going to be coming in as a partner, I need to know
who he is and what he is and what he does and what his plans
are. It’s absolutely senseless, I mean, to come in with a proposal like
this. I’m really, really annoyed about it. At the end of the day, I’m not
in the Den to be investing in subsidiaries of corporates. I’m investing in people. And you don’t control the company. So I’m going to say
this is not for me. I’m out. Thank you, guys, so much. Melissa must leave
the Den with nothing. Her deal with the German candy
giants may have enabled her to turn her 3D vision into reality,
but it also scuppered her chances of snaring a Dragon. That certainly wasn’t the sweetest
deal we’ve had in the Den, that’s for sure. No. I feel disappointed that the main
focus of the discussion was around the ownership
of the business and not around the incredible innovations
that we’ve developed. The products are what we are most
proud of, and I was really glad to see that they liked them
in the initial instance.

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100 thoughts on “Promising pitch falls apart after shocking revelation | Dragons’ Den

  1. I wouldnt give her 80,000 pounds but I would give her one, two, three four, five, six and seven any day of the week!!

  2. Bloody tej things so much of himself. He just thinks 'i'm a entrepreneur, I'm successful and I know what I'm talking about'

  3. " I have a great idea for an electric car….."
    "…it has a Tesla badge on it……."
    " Yeah…but that's not how it works……..mine has glitter…"

  4. Casting director: "Jenny, wanna be in the new season of Dragon's den???"
    Jenny: yes… and for that reason I'm out

  5. She said the sale price of the business was “in the millions” probs means it was like 1.6 mil doesn’t mean many millions Jenny

  6. Woman: Hel……
    Jenny: I’m out
    Woman: but you don’t know what the product is yet
    Jenny: i know, but i’m out
    Woman: ok, sooo, anyway, VITAMINS
    Tej: i’m im
    show ends

  7. I 3D print myself, but here it is a silly gimmick that I’m surprised the dragons couldn’t see through. It is a very inefficient way to produce a vitamin supplement product. 3D printing brings advantages in producing items with involved physical geometry, not blobs, tablets of vitamins. Existing methods where you add your ingredients to a mix and inject to a shape are a million times more efficient. Customisation per customer? That only requires tracking and injection at production. I thought the dragons would see this.

  8. These humans aren’t dragons. They should be embarrassed copying every aspect of shark tank, and referring to themselves as a mythical creature in fantasy story’s.

  9. The minute Melissa turned out to be a minority shareholder/junior partner/glorified employee in a business that is part of a global conglomerate based in Germany, the Dragons attitudes were collectively like "What are we talking to you for again?".

  10. Hi there Jennifer.
    I'd like to offer you 93% of every business in the world combined for a packet of crisps

    ..

    I'm out.

  11. They were exactly right…. she is just a subsidiary of Katjes which is HUGE here in Germany. And actually Bastian Fassin only owns 90% of Katjes…. the other ten percent belongs to another man.

  12. Who in the BBC thought jenny was going to be the right choice for this show …talk about a fish out of water …in the end it was turning into a joke …look at all the jenny I am out comments …the person was promoted no doubt knowing a little how the BBC works

  13. Oi, you've just used a term I'm using for my 'Yummy Tummy Candy' – it'll be on the market next week. Yummy Tummy? Yes, because if you think you're gonna have the shits, just take two pieces of Yummy Tummy and, hey presto, no running to the bog 🙂

  14. I'm not a business man, so all this talk on subsidiaries, conglomerates, and what have you is not my forte. What I am good at is numbers and psychology, on the number side she was looking to give a 2% of her business which is 10% of a parent brand! Not a good look. Something tells me that there is more to story between her and the 90% shareholder, after all if I owned 90% of a business and someone wanted to sell 2% of their 10%, I would want to know who it is that is coming to join the corporation.

  15. Peter's face when cruelly fail (Barbara) found the lie in the shareholders agreement was like I told you so..Damn I'm good

  16. Hi can someone please explain in simple English on baby language what's exactly going on lol before I dont understand this share holder thing.

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