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That episode of Dragons Den is infuriating. Here is a guy who has invented something with a widespread, common appeal. He invented a product that potentially fi

by thomk 8y ago

That episode of Dragons Den is infuriating. Here is a guy who has invented something with a widespread, common appeal. He invented a product that potentially fixes a real problem in 1,000,000,000 units per year and he has to give away 20% of his invention to get support.

acjohnson55 8y ago
He had the option to reject the deal, no? It's a free market for venture capital, so if that deal is so bad and the opportunity is so good, he should have been able to find a better one. From my perspective, having a great idea is not enough. Even having a proof of concept is not enough. There's a lot more that goes into building a successful business. Investors have to price in the chances of all the things that can go wrong in the process against the perceived value of the product. Likewise, as a founder, you often need at least some investors that can help propel you forward in some way. That can be worth a lot more than dumb money. I haven't watched the episode you mention, but generally this is how I think about it.
- annabellish 8y ago
  >Likewise, as a founder, you often need at least some investors that can help propel you forward in some way. Which is the infuriating part, when the "investors" contribute nothing to the project but a tiny slice of money they didn't work for to begin with, and get vastly disproportional returns for it.
  - mcguire 8y ago
    Welcome to venture capital.
    - annabellish 8y ago
      That it is common makes it neither more nor less just.
  - acjohnson55 8y ago
    I feel like you've missed my point. There are a limited number of good opportunities to invest in, so it's not like investors get to unilaterally set the terms of these deals. They have to compete with each other, at least on the most attractive deals. A savvy founder turns down money on bad terms.
    - annabellish 8y ago
      I got your point, I just don't agree with it! I think that's a consistent logical position to take, but I don't think it's undeniably _ethical_ because of that.
      - acjohnson55 8y ago
        I guess I'm missing what it is to disagree with. Are you arguing that people with good ideas should simply be entitled to the capital to pull them off, to avoid the need to compete in capital markets?
        annabellish 8y ago
        I mean, sure, that'd be great. I think it'd need one heck of a societal overhaul to achieve, though. If we wanna keep it in terms of a capitalist market, the problem is that investors are essentially selling a service just like anyone else, but because wealth inequality is where it is, there's relatively little competition in that "market". Thus, what you get is very high "prices" for relatively poor "service". This is a problem. In an ideal free market, investors are just another kind of business, and would compete both on price and their offering such that everyone was getting a good deal and everything moved along efficiently. In the real world, investment is a very concentrated market, meaning that the deals are shoddy and inefficient.
  - thomk 8y ago
    Yes, exactly.
- thomk 8y ago
  I see your point and I appreciate your perspective however, he didn't just have a proof of concept, he had a product. It is completed and working.
GordonS 8y ago
The investors on Dragon's Den always want too much equity - I would imagine that anyone going on the show would know that. I also think some people go on the show knowing that they're not going to get investment at a sensible equity level, and are really on there as a way of marketing their idea to a wider audience.
uneven 8y ago
Based off of a Daily Mail article about it [1], it looks like the deal fell through anyways, so (hopefully) he was able to retain full ownership in the deal with Tesco. I love the idea and wish Mr. Pritchard the best. Hopefully they can get it over to the US soon! [1] http://www.dailymail.co.uk/sciencetech/article-4335468/British-inventor-cleans-deal-Tesco.html http://www.dailymail.co.uk/sciencetech/article-4335468/Briti...

by thomk 8y ago

acjohnson55 8y ago

He had the option to reject the deal, no? It's a free market for venture capital, so if that deal is so bad and the opportunity is so good, he should have been able to find a better one. From my perspective, having a great idea is not enough. Even having a proof of concept is not enough. There's a lot more that goes into building a successful business. Investors have to price in the chances of all the things that can go wrong in the process against the perceived value of the product. Likewise, as a founder, you often need at least some investors that can help propel you forward in some way. That can be worth a lot more than dumb money. I haven't watched the episode you mention, but generally this is how I think about it.

annabellish 8y ago
>Likewise, as a founder, you often need at least some investors that can help propel you forward in some way. Which is the infuriating part, when the "investors" contribute nothing to the project but a tiny slice of money they didn't work for to begin with, and get vastly disproportional returns for it.
- mcguire 8y ago
  Welcome to venture capital.
  - annabellish 8y ago
    That it is common makes it neither more nor less just.
- acjohnson55 8y ago
  I feel like you've missed my point. There are a limited number of good opportunities to invest in, so it's not like investors get to unilaterally set the terms of these deals. They have to compete with each other, at least on the most attractive deals. A savvy founder turns down money on bad terms.
  - annabellish 8y ago
    I got your point, I just don't agree with it! I think that's a consistent logical position to take, but I don't think it's undeniably _ethical_ because of that.
    - acjohnson55 8y ago
      I guess I'm missing what it is to disagree with. Are you arguing that people with good ideas should simply be entitled to the capital to pull them off, to avoid the need to compete in capital markets?
      - annabellish 8y ago
        I mean, sure, that'd be great. I think it'd need one heck of a societal overhaul to achieve, though. If we wanna keep it in terms of a capitalist market, the problem is that investors are essentially selling a service just like anyone else, but because wealth inequality is where it is, there's relatively little competition in that "market". Thus, what you get is very high "prices" for relatively poor "service". This is a problem. In an ideal free market, investors are just another kind of business, and would compete both on price and their offering such that everyone was getting a good deal and everything moved along efficiently. In the real world, investment is a very concentrated market, meaning that the deals are shoddy and inefficient.
- thomk 8y ago
  Yes, exactly.
thomk 8y ago
I see your point and I appreciate your perspective however, he didn't just have a proof of concept, he had a product. It is completed and working.

GordonS 8y ago

The investors on Dragon's Den always want too much equity - I would imagine that anyone going on the show would know that. I also think some people go on the show knowing that they're not going to get investment at a sensible equity level, and are really on there as a way of marketing their idea to a wider audience.

uneven 8y ago

Based off of a Daily Mail article about it [1], it looks like the deal fell through anyways, so (hopefully) he was able to retain full ownership in the deal with Tesco. I love the idea and wish Mr. Pritchard the best. Hopefully they can get it over to the US soon! [1] http://www.dailymail.co.uk/sciencetech/article-4335468/British-inventor-cleans-deal-Tesco.html http://www.dailymail.co.uk/sciencetech/article-4335468/Briti...