hello dragons my name is Ross flammond
I'm the founder of bug bakes and I'm
asking for 50,000 pounds in exchange for
10% of my business my product is simple
baked treats for dogs and it's the UK's
first to use insect protein instead of
livestock which might surprise you to
learn is a very good thing to be doing
that's because pet food makes up a
significant part of the total impact
from the meat industry which is itself
one of the most environmentally damaging
practices on the planet farming insects
on the other hand provides the exact
same nutrition while having a fraction
of the environmental impact I have the
idea for this while I was at university
I spent the last two years creating
extensively testing and selling my
product and I'm convinced it is the
future of pet food thank you all very
much for your time I will welcome any
questions but first would you please
come and help yourself to a bag of our
treats from Max here
dog treats made from insects is the
business idea
Ross Lamond is hoping we'll fly with the
Dragons good boy
he's offering a 10% equity stake in his
company in return for a 50,000 pound
investment and it appears max the demo
dog has almost closed the deal already
this is where I just say had my money
tail Albani
is first to quiz the young entrepreneur
and he wants to know about the bugs that
are the basis of his business hi Ross hi
so what type of insects to use I use
crickets just cricket cricket flour so
that brown powder there if you can see
in the table bats cricket flour and dogs
eating bugs is it a big market more than
dogs eating bugs environmentally
friendly pet food is a big market so for
the first time ever one in three people
in the UK fall into the category of
either being vegan vegetarian or
flexitarian which means one or three
people actively reduce or eliminate meat
from their diet so right now where are
you selling so I sell online and through
about 40 retail shops
are you finding them literally one by
one talking to them and selling your
product or are you selling through a
distributor actually the shops find me
I've stopped approaching them so in the
last year I've had about 20 shops stock
here just cuz they heard about me
through word-of-mouth so what's your
most often sold product it would be the
subscription bag yeah how the moment got
sixty and I've been only advertising for
three months so last month how many
signed up last month twenty signed up
right so it's got a bit of traction but
it's got a bit of traction I'm yet to
really advertise and I've spent two
years validating that dogs like them
owners are willing to buy them and the
markets there and I believe all of thats
true and the reason I'm here is I think
this is a ready to scale product despite
a spirited defense of his achievements
to date
Deborah Medan discovers the
entrepreneurs subscription service has
yet to take off
Ross's dream dragons Sara Davies seemed
a little squeamish about his product
initially but it appears she's warming
to his cricket based creations
right I'm really like you were like the
product I like the story but then I was
a little bit worried about the numbers
what's the dream what's the ambition I
think I've just been limited by the only
kind of marketing I've been doing is
word of mouth by tearing up to markets
and events demand I think is definitely
there for a product like this I don't
think enough people know about this to
say it's selling itself plus the last 12
months
what do you turnover hey just under ten
thousand pounds so it is very much
startup I'm actually going into the dog
business not not in this area but it put
in more toys one part of me says do I
need widen my horizon the investment
would be poor machines yes there's a
machine called a rotary Mulder machine
mmm which means instead of having to
roll out viscous I think I've rolled out
about 350,000 biscuits by hand which is
horrible
when was that cost it costs about 21
thousand pounds and premises I'm looking
to keep it in the house just for the
very short term it helps me what in the
house in the family home so this quite
the family affair yeah I'm sure I'm sure
my mom's put more labels on packets than
she wanted but what concerns me is
you've got to go a long way to do any
real turnover you know it should be more
yeah it's like I'm gonna cry for you
the entrepreneur reveals a home-based
business with mum manning the production
line which is currently only just moving
in first gear
but it appears Peter Jones now want to
discuss one of his common bugbears the
valuation Ross has placed on his company
so sales in the last 12 months has been
about 10,000 pounds just under yet you
currently value the business
at 50-times turnover is there a business
that you believe that could ever get
that sort of valuation I appreciate this
is at the higher end of valuations the
reason I put it there is I've been
informally approached by some high
wealth individuals who expressed an
interest in investing and that's the
valuation that they've put to me so how
much have they invested then no one else
has invest I've just had just heard
either first meetings or telephone
conversations sorry I thought you said
that they said that they valued the
business at 50 times as they expressed
an interest in investing and they put
they put forward by the investment of 50
times and you didn't bite their arm off
well I had my first meeting with one of
them a week ago seriously if you have
any inkling that that is a possibility
you need to take their money very
quickly and if they continue to invest
at that level they went behind net worth
individuals are very long
have you spoken to some of the bigger
players that might be able to buy volume
I was recently approached by pets at
home who has to place a test order but
that was a few weeks ago and I've not
heard back have they placed an order no
I don't know why to be honest with you
did he call them yeah what did they say
no explanation so I didn't get through
to the exact buying the person I phone
didn't know there was pushing though
yeah I definitely well I'm not gonna
just leave it that's got to keep bad or
I'm one of them gives you the order yeah
I will do that but if there's a
disconnect for me is that you've spent
two years of your life doing this and
yet you don't seem to have that that
tenacious punch yeah well I'll admit the
last two years sales haven't been my
main focus so you'll be the best kept
secret I mean that's almost barking mad
isn't it it's crazy that you haven't
done that you know yes why I was
you're demonstrating actually that at
the moment it Sun investable so that's
the reason why I'm out
the entrepreneurs apparent reluctant to
push his product is a frustration for
Peter Jones and he ends his interest
before he entered the den Ross was
hoping Sara Davies might be able to help
him take over the world with his eco
treats but it appears she's more
inclined to bring him back down to earth
you really had me until you uttered
those words sales haven't been my main
focus mm-hmm and then honestly you've
just lost me there well what can
possibly be a main focus if it's not
sales you know when I started my
business I spent a lot of time working
on research and development
but your focus has got to be those sales
it really has and honestly I was really
keen to invest but I should you've just
lost me there it's not for me
I don't Ross I don't agree with that I
think you're right not to push sales at
the moment because actually your
resistance is insects
what we said resistance insects you
haven't sold because you're inserted to
sex problem thanks Deborah for that it's
resistance to insects yes because if you
go to the mainstream retailers right now
with no demonstration whatsoever that
anybody is going to buy a pet product
made of insects they are going to say
forget it and there's a second problem
to this this is a treat this is not dog
food so it kind of tackles the problem
from the wrong end because if my dog's
eating meat what's the point in me
saying actually the few treats that I
give him our insect based it just feels
like the tail wagging the dog and I
don't do the puns pun bastard sits on
the end down there
oh there's everything I love about this
my heart says I would love to but my
head says it's a long way off so I'm
really sorry Ross I can't see it's a
good investment right now so I won't be
investing I'm out
Plus what I'm a little bit disappointed
in is your initiative to sell the
product I'll admit I don't claim to be a
well-rounded business person yet and
it's not about being a well-rounded
business person I think you've got a
good head on you but the problem is that
you're not hungry for sales so good luck
with it thank you very much but I'm out
the entrepreneurs missing zest to sell
his product is leading to the Dragons
losing their appetite to invest as tazed
Levani becomes the fourth to pass on the
proposition only touka Suleyman remains
will he choose to expand his dog related
business portfolio Ross hello Oh
grilling is it Gomez planned and I'm
gonna say so
look I'm torn on this one because I I am
in the dog business yeah if there is a
business yeah I'd like to invest them
however I don't know that hold on listen
our job in here in the den to establish
whether or not we think there's a
business to invest in but that's up to
me double up to you thank you I'm just
talking things through am I allowed to
do that you just need to make him an
offer not subject to finding out if he's
got a business well I can make any offer
I want he can take it or leave it
so going back I don't really know
whether there's a business here
but I wouldn't find out
but your valuation is crazy for ten
thousand pounds her litter business
it's a tiny business I would offer you
all the money but I want 50% so we're
equal partners you want to think about
it yep I'll have a think thank you Tuka
Suleyman locks horns with debra Medan
then makes a play for the bug based
business just but the Dragons audacious
demand of 50% of Ross's company is way
more than the 10% he's willing to give
away I've had to think about it I think
at this time I'll decline your offer as
I think I will be able to get that fifty
thousand pounds for lice equity but but
you have to understand before you say no
to me right is that is what I could
bring to the party I will accelerate you
so fast you won't even know I'll be
completely honest I came in here with a
redline of 50% is way above it would you
be open to any kind of clawback of
equity if I was able to get your money
back within a time frame but if you got
your money back we're in 12 months I'll
go down the 40% and if I doesn't know it
that's it
35% I would shake with the choir back in
12 months
mm-hmm
just somebody who doesn't sell you're a
tough negotiator
I love the way you look me in the eye
you got a deal okay okay great
thanks thank you all for your time
congratulate the confident entrepreneur
holds out for better terms and tuka
süleyman reduces his demands and bags
our deal Ross heads back to faith with
the 50,000 pounds he was seeking and an
experienced dragon on board with the
business I'm absolutely exhausted that
was one of the most intense things I've
ever done I see why they're called
dragons I got roasted I've got to give
him a good shake to wake him up you need
to rock it up is behind these what he
needs
well if it doesn't work you'll have a
lot of bugs to me
[Music]