Dragons blown away by "toughest negotiation in the Den" | Dragons' Den

Summary

Brian Smiley and Euan McCreith, founders of Beezer.com, pitch their disruptive mobile app creation platform to investors on Dragon's Den. Seeking £125,000 for a 4% stake, they showcase how their platform allows users to bypass app stores and send apps directly to their audience. Despite challenges with big data and equity negotiations, the duo secures a deal with Peter Jones for 15% equity, which drops to 10% once the investment is recouped. Their journey reveals the power of persistence and negotiation, ultimately securing the resources to scale their innovative business.

Takeaways

• 😀 Beezer.com offers a platform to create mobile apps without the need for app store distribution, solving the problem of low app downloads.
• 😀 Brian Smiley and Euan McCreith are seeking a £125,000 investment for 4% equity in Beezer.com, projecting significant growth.
• 😀 The duo has already gained traction and secured partnerships with major platforms like Wix, projecting £1.2 million in turnover by the end of 2019.
• 😀 Beezer allows businesses to build apps and distribute them through methods like SMS, email, and social media, bypassing traditional app stores.
• 😀 Brian and Euan’s experience with tech businesses and their past struggles with app distribution motivated them to create Beezer.
• 😀 The investors (Dragons) show interest in Beezer due to its disruptive model but demand varying equity shares, starting from 5% to 15%.
• 😀 Beezer’s potential to revolutionize mobile app distribution and provide value to businesses drew the attention of multiple investors.
• 😀 Wix.com is projected to be a major revenue earner for Beezer, acting as a distribution platform for users to create apps.
• 😀 The duo faces tough questions from the Dragons, including the need for a clear customer base and how to leverage big data.
• 😀 After rejecting initial offers, Brian and Euan eventually accept a £125,000 offer for 15% equity, which drops to 10% after Peter Jones recoups his investment.
• 😀 Brian and Euan close the deal with Peter Jones, securing not only the investment but also his expertise and network to scale Beezer.com.

Q & A

What is Beezer.com and how does it work?

Beezer.com is a platform that allows businesses to create their own mobile apps using a simple online tool. Once created, these apps can be sent directly to users via methods like SMS, email, or social media, bypassing the traditional app stores.

Why did Brian Smiley and Euan McCreith decide to create Beezer?

Brian and Euan created Beezer after hearing from their clients, particularly in Sydney, that despite spending a lot of money building apps, they struggled to get users to download them from the App Store. Beezer's solution allows businesses to bypass app stores entirely.

How does Beezer’s business model generate revenue?

Beezer generates revenue through partnerships with website builders like Wix and Weebly. These platforms integrate with Beezer to allow users to easily create apps, which then helps drive app distribution and user engagement. Wix is expected to be Beezer’s largest revenue earner.

What financial projections did Brian and Euan provide for Beezer?

Brian and Euan projected a turnover of £150,000 per month by the end of the first year, aiming for £1.2 million in turnover by the end of 2019, with a net profit of £360,000.

What is Beezer’s current cash situation and burn rate?

Beezer has just under £200,000 in the bank with a burn rate of £30,000 per month. This means they would run out of cash within six to seven months unless new funds are raised.

How did the Dragons react to Beezer’s proposition?

The Dragons were intrigued by Beezer’s innovative solution, with several of them making offers to invest. However, the entrepreneurs faced tough negotiations, especially regarding the equity stake being offered.

What were the offers made by the Dragons, and how did Brian and Euan respond?

The Dragons made several offers, ranging from 5% to 15% equity in exchange for the £125,000 investment. Brian and Euan rejected initial offers, particularly from Tej Lalvani and Deborah Meaden, in favor of negotiating with specific Dragons they were keen to work with, particularly Peter Jones.

What were the key reasons Brian and Euan preferred Peter Jones and Deborah Meaden as potential investors?

Brian and Euan valued Peter and Deborah's expertise and network, believing they could add significant value to the business, particularly in scaling it internationally and leveraging their business contacts.

What was the final deal that Brian and Euan accepted?

Brian and Euan ultimately accepted Peter Jones' offer of £125,000 for 15% equity, with the possibility of reducing it to 10% once Peter’s investment is repaid.

How did Brian and Euan feel about the negotiation process?

Brian and Euan experienced a roller coaster of emotions during the negotiation. They were initially confident but faced tension as they rejected offers. In the end, they were thrilled to close the deal with Peter Jones, feeling the experience was a tough but rewarding negotiation.