Dragons' Den - Magic Wand Remote - Part 1
Summary
TLDRChris Bernardo and Richard Pleakley, founders of the Wand Company, seek a £200,000 investment for a 10% stake to grow their business, which specializes in magical fantasy products. They introduce their first product, a real magic wand that functions as a universal remote control for electronics. Despite selling 10,300 units in their first year, they aim for £18 million in revenue within three years. The pitch is met with interest from potential investors, who offer varying deals, including equity back for performance milestones, highlighting the product's innovative appeal and the company's growth potential.
Takeaways
- 🧙♂️ Chris Bernardo and Richard Pleakley are the founders of the Wand Company, seeking a £200,000 investment for a 10% stake in their business.
- 🎩 They aim to capitalize on the 'magic market', a significant industry where consumers spend billions on fantasy products.
- 🪄 Their flagship product is a real magic wand, designed to control various devices in the home, such as music, TV, ceiling fans, and lighting.
- 📈 The Wand Company has already sold over 10,000 units since its inception and projects revenues of approximately £18 million within three years.
- 🤖 The technology behind the wand is a universal remote control chip used by one of the world's largest remote control manufacturers.
- 🔄 The wand's software is designed to recognize its orientation, allowing for intuitive control regardless of how it's held or turned.
- 🚀 The company has plans for future products that are not yet disclosed, with a focus on creating magical and surprising items.
- 💼 Both founders have a background in electronics and remote control development, with a previous product selling about 2 million units.
- 💰 The cost of the magic wand is around £10 in the UK, and it is sold directly to customers for £50, indicating significant profit margins.
- 📊 The Wand Company expects to sell 1.2 million units in the current financial year, projecting a net profit of £600,000.
- 💼 The founders are not seeking the investment for production but rather for growth and leveraging the expertise of the investors.
- 🤝 The pitch in the 'den' resulted in offers from multiple investors, with varying conditions and percentages of equity involved.
Q & A
What is the name of the company founded by Chris Bernardo and Richard Pleakley?
-The company founded by Chris Bernardo and Richard Pleakley is called the Wand Company.
What investment are Chris and Richard seeking from the investors?
-Chris and Richard are seeking an investment of £200,000 for a 10% stake in their company.
What is the main product of the Wand Company?
-The main product of the Wand Company is a real magic wand that can control various electronic devices.
What technology is used in the magic wand to control electronic devices?
-The magic wand uses a universal remote control chip that can send out and learn codes for various electronic devices.
How many units of the magic wand did the Wand Company sell by Christmas of the previous year?
-The Wand Company sold over 10,000 units of the magic wand by Christmas of the previous year.
What is the projected revenue for the Wand Company within 3 years with the help of the investment?
-With the help of the investment, the Wand Company projects a revenue of about £18 million within 3 years.
What is the cost of the magic wand to produce?
-The cost of the magic wand to produce is about £10 landed in the UK.
What is the selling price of the magic wand to customers?
-The selling price of the magic wand to customers is £50.
What is the projected number of magic wands to be sold in the current financial year?
-The projected number of magic wands to be sold in the current financial year is 1.2 million.
What is the projected net profit for the Wand Company if they sell 1.2 million units?
-The projected net profit for the Wand Company if they sell 1.2 million units is £600,000.
What special circumstances are expected to influence the sales of the magic wand?
-Special circumstances expected to influence the sales include the release of two more Harry Potter movies and the popularity of Wizarding-themed games and franchises.
Outlines
🧙♂️ Magical Wand Company Pitch
Chris Bernardo and Richard Pleakley, founders of the Wand Company, are seeking a £200,000 investment for a 10% stake in their business, which aims to create magical and fantasy products. They highlight the vast market for such items, with millions of consumers spending billions annually. Leveraging their combined 40 years of experience in design, development, and electronics, they have developed a 'real' magic wand that can control various devices, such as music players and TVs. The wand's capabilities include playing music, adjusting volume, changing tracks, and operating home appliances. Despite having sold over 10,000 units within their first year, they believe with investment, they can reach £18 million in revenue within three years.
🤝 Negotiating the Dragon's Den
The Wand Company's founders face a series of offers and negotiations in the 'Dragon's Den.' James Caan inquires about the technology behind the wand, which is revealed to be a universal remote control chip used by a leading remote control manufacturer. The wand's unique feature is its ability to recognize its orientation, allowing for consistent operation regardless of how it's held. The duo is also developing a new, undisclosed product with strong patent potential. The company's sales figures are scrutinized, with over 10,300 units sold at a significant markup from cost to retail price. The founders project a conservative estimate of 1.2 million units for the financial year, expecting a net profit of £600,000. Various offers are made, including a ratchet deal from Duncan Bannatyne, which would require giving back equity if certain profit milestones are met. Other dragons propose different equity stakes for their investment, with some suggesting performance-based adjustments to the equity share.
Mindmap
Keywords
💡Investment
💡Magic Wand
💡Technology
💡Remote Control
💡Market
💡Revenue
💡Equity
💡Profit
💡Product Development
💡Patent
💡Distribution
Highlights
Chris Bernardo and Richard Pleakley introduced their company, the Wand Company, seeking a £200,000 investment for a 10% stake.
They reference Arthur C. Clark's quote about advanced technology being indistinguishable from magic, highlighting the vast market for fantasy products.
The Wand Company's first product is a real magic wand with capabilities to control various devices such as music and home appliances.
The wand uses a universal remote control chip from a leading manufacturer, allowing it to learn and send codes for various devices.
The software is designed to recognize the wand's orientation, enabling control regardless of how it is held.
Chris and Richard have a background in electronics and remote control development, with a past product selling 2 million units.
They have sold over 10,000 units of the magic wand by Christmas of the previous year.
The Wand Company aims to reach revenues of about £18 million within 3 years with the help of investment and expertise.
The product costs about £10 to produce and is sold directly to customers for £50, indicating significant profit margins.
The company projects conservative sales of 1.2 million units for the current financial year, with a net profit of £600,000.
Duncan Bannatyne offers the full £200,000 investment but requests 30% equity with a ratchet clause for profit performance.
Hagrid offers £200,000 for 25% equity with a potential share buy-back based on performance.
Deborah Meaden proposes an offer of 20% equity going down to 10% if the company makes £600,000 profit in the first year.
The Wand Company has signed deals with distributors and is in talks with major retailers like Target and Sky.
The company's next product is undisclosed but is described as strongly patentable and part of their magical and surprising product line.
James Khan expresses interest in the product and the team, but does not make a counteroffer on the table.
The Wand Company is considering the offers and the potential benefits of having multiple investors on board.
Transcripts
[Music]
hi I'm Chris Bernardo I'm Richard
Pleakley and together we're the wand
company and we're here today to ask for
£200,000 investment for a 10% stake in
our company
Arthur C Clark is famous for having said
any sufficiently advanced technology is
indistinguishable from Magic and the
magic Market fantasy Market is huge
hundreds of millions of people spending
billions of pounds each year on magical
fantasy products and we thought with our
combined experience of 40 Years of
design development Electronics
development the rich and I would get
together and make some really magical
products our first one is a real magic
wand
and this is it so it looks pretty much
as you'd expect for a Wizard's wand but
of course a real magic wand should
actually do something and so with this
wand I can for
example play some
music I can rotate it to turn the volume
up or the other way to go down again I
can give it a flick to change
tracks stop the music in fact you can
control anything in your house so for
example I can turn on the
TV which I can fast
forward rewind
pause turn it off or even things like
ceiling fans and
lighting um we started the company last
year and by Christmas we'd sold over
10,000 units but we feel that with your
help investment and expertise we could
take the wand company to a revenue of
about £18 million within 3 years thank
you very
[Music]
much business partners Chris Bernardo
and Richard blakesley want the dragons
to spot money-making potential in their
magical take on the remote control so if
I come right up to
it in return for just a 10% stake they
need £200,000 to grow their business but
what's behind the magic James Khan wants
to
know what's the techn techology in this
that turns the TV on is it the same as
the remote control it is actually and
it's a chip that's applied by one of the
largest remote control manufacturers in
the world so we have contacts there and
it's a universal remote control chip so
that is the thing that sends out the
codes and learns the codes because it's
a learning remote control so you can
teach it codes of a ceiling fan or if
you had electric curtains or lights even
this responds by an action exactly
that's the difference it's bit like the
Wii really yeah and the way we've
written the software is it knows which
way up it is the whole time so it
doesn't matter which way up it is if you
turn turn it to the side as far as it's
concerned now that's the top again and
if you turn it around again that's still
the top and it still knows which way is
up right what's your next product uh
apart from this one that we've shown
here yeah
um well
um I I I can't say but it's I can't say
what our next product is because we
haven't protected it and we think it's
got very strong patentable so it's all
based around
magic surprising products so the one
company we believe will be a brand that
will take make sort of
quite magical and surprising
[Music]
products the dragons are clearly
absorbed by the product and Duncan
bantine wants more information about the
inventors
themselves so tell me about about the
two of your an I mean where have you
come from tell me your your story Chris
um that I did an engineering degree from
there I started a company that made an
electronic display as a component at
that place I met Richard we developed a
remote control actually which sold about
2 million units this this thing you
might have seen it about 2002 and what
about you Richard are you I was working
for the same company that did this up
until Christmas I'm now working
full-time for the wand company um let me
just go back through your figures then
you sold 10,000 of these ones yeah just
over 10,000 10,300 what does the product
cost you was about £10 landed in the UK
how what do you sell it for £50 you said
for 50 that's a huge markup yeah that's
direct to customers okay so what you
selling to wholesalers for between 28
and 35 £3 31 was our Blended average
selling price Blended average yeah it's
great price on a £10
product impressive margins great product
Chris and Richard are clearly doing well
in the den but are yet to receive an
offer will they now stand up to the
scrutiny of retail expert theop
petus so how many do you really believe
you can sell your to calendar year you
got Financial year Year we're projecting
conservatively 1.2 million for this year
how much net profit are you going to
make out of 1.2 million 50% .6 million
£600,000
what makes you think that you require my
£200,000
we we don't we don't need the cash to
make this worst case forecast we're
talking about but we're saying within
your investment we think we can do say3
million P worst case is 1.2 million and
make £600,000 profit that's correct
purely from this you've already
developed you've already got working
it's it's
there and you want £200,000 for 10%
y okay have there been any special
circumstances you think that have
influenced this so for instance the
Harry Potter movies yeah there are two
more Harry Potter movies coming one of
them is is this year in November and
then one is the next year in the summer
but actually it's appealed to people who
like the whole Wizarding thing there's
there's huge online games which like
World of Warcraft Age of Empires there's
other film franchises like naria and
there's uh Lord of the Rings what's the
income a quarter well it's been about
£100,000 in the last quarter expect that
to be growing up a little bit more than
that in the next quarter as we had more
resellers we just signed up a couple of
Distributors we're just concluding a
deal with Target in the US and one of
our Distributors wants to put the
product into skyl they are putting in
Sky they putting in Sky okay so skyl for
example it's a magazine the back of the
seat of every us internal flight pretty
much that 600 million people a year sit
in front of that
Chris Richard we could be here all day I
want your attention for a minute okay
I'm going to make an offer for all the
money the £200,000 but I want not
10% but 30% of the company if you make
600,000 profit I'll give you 10% of
equity back you have 80% of a business
making more than £600,000 profit and we
think we can grow that a lot from there
so so does that dealan can we ask if
anyone else is interested to you can if
you want to but you'll be wasting your
time thank
you Duncan bantine is the first dragon
to break cover but the structure of his
ratchet deal would still end up with the
duo giving away double the equity they
were offering will any rival dragons now
choose to compete
you've currently had your your offer
from Voldemort over
there and now Hagrid's going to come in
and play the same
game I'd like to offer you the full
amount of money2
200,000 for
25% of the equity of the
business can we have any uh share back
if we have any particularly good
performance then from that point if I
put the whole 200k in and own 25% of the
business that means one thing to you
you've got my
attention yes and I put quite a lot of
work into it because £2 200,000 is quite
a lot of money is quite a lot of money
okay would you like me to make you an
offer would you be interested in joining
Duncan Peter Well the fairness of the
other two they've offered you 100% of
the money and that in the den shows that
somebody actually wants to do this for
the themselves what offer would you like
from me that would make you happy 20%
going down to say 10 if we make 1.2 net
profit in this year you mean 600,000
profit no mean no no I mean I mean what
we think we should be able to do with
you guys on board so you're saying if
you do 3 million yeah you get 10 back if
we can make the business what we think
it should be 1.2 profit yeah I think if
you were talking about a sliding skill
getting it down to 12% so that work for
you that would work thank you Deborah
James I think it starts becoming less
about the percentages and more about
what you're going to get out of it your
answer to Theo was in your Ideal World
you'd have walked out here with two
dragons if the the least we can give
away is say 20 25% then I think we want
two dragons for that I think okay well
I'm going to offer you half the money
for
10% no Ratchet that's not we could offer
is it why not well the is offered this
a moment same equivalent and give them
what you they want two dragons
[Music]
oh in a canny move Deborah mean's tactic
to secure the deal is to differentiate
her offer from those of her Rivals but
with just one Dragon left will James
Khan now opt to share the bid or will he
want it for
himself I'm must I do like the product
and I like you guys thank you and I've
just been sitting here just listening to
the band
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