When anyone comes up with an invention, the next step is to find someone to give them the financial backing that they can’t supply themselves. To do this, they must have a tangible product for the person or company they are approaching to get a proper feel for. The idea needs to be well thought through in its practicality and monetary feasibility. The inventor needs to have done thorough, provable research to show that there is a niche in the market that this particular product would fill, that it would make a profit.
This type of negotiations have gone on since the beginning of time. Now, however, during our times of economical strain, it has become harder to get people with money to back something that may or may not work. That may or may not prove to be profitable. However, it is still possible and the occurrence of the Dragon’s Den TV programme has got many would-be budding inventors at their desks scribbling away with their plans.
The whole Dragon’s Den format comes from Japan, where it is owned by Sony. Celebrities or high profile company owners that are looking for new investment opportunities sit on a panel and have a designated amount of money in mind that they would like to sink into a new venture.
Trawled in front of them are average Joe’s who are allocated a timed slot to pitch their idea to the dragons and convince them that this is the one deal they cannot afford to miss out on. This is not for the faint hearted. The ones with the money in the Dragons Den are confident and adept at business. They know all the right questions to ask and if you’re not on top of your game and knowing it inside out they will eat you for breakfast.
Those who truly believe in their product, who have fully researched their market, who know their target customers and have the confidence to put this across simply whilst still giving the dragons something they can see or feel, will give them a much better prospect of gaining the backing that they require.
For those that enter the Dragon’s Den trembling with fear, stuttering with nerves and unsure of themselves will come across as unsure of their product. They will be chewed up and spat out in no time by the dragons themselves.
Contestants that have managed to secure finances from the Dragons Den are those that know their product well but do not appear too pushy or cocky. They pitch their idea and hopefully the product will sell itself. Once they have satisfied any doubts the dragons may have and fully sold their product to the best of their ability, then the dragons need to decide whether they want to invest or not.
Negotiations take place. If a dragon would like to invest but is unsure of the products feasibility, they can offer a reduced amount to what the contestant is asking for. While this may be difficult for the person that needs the money, reputation goes a long way and that is what the dragons bring with them, reputation and influence that might just make them successful in their venture.
So what does the dragon get from all this? Well, during negotiations, they can also bargain. The inventor will suggest a reward, usually a stake in the business venture or a cut of the profits, depending on the amount invested. The dragon will then attempt to bring this nearer what he sees as a good deal and eventually an agreement will be reached. One happy inventor, one happy dragon.