The Dragons Are Not Convinced Of "Value My Stuff Now" Strategy | Dragons' Den | Shark Tank Global

Summary

Patrick van Devost, an antique dealer, pitches his online antiques valuation service, valuemystuff.com, to investors in the Dragons' Den. Seeking £100,000 for 20% equity, Patrick explains his business model where users upload photos of their items for expert appraisals. Despite initial skepticism from the Dragons about financial sustainability, Patrick impresses with his background and passion. After tough negotiations, two Dragons, Theo and Deborah, offer £100,000 for 40% equity, with a performance-based reduction to 30%. Patrick accepts, securing the investment needed to grow his business.

Takeaways

• 😀 Patrick Van Devost is the founder of *Value My Stuff*, an online platform that helps people get valuations for antiques and art by uploading photos.
• 😀 Patrick is seeking £100,000 for 20% equity in his business, aiming to expand the service and its customer base.
• 😀 Customers can upload photos of their items and receive a valuation from one of the 28 experts within 48 hours.
• 😀 The business charges £4.99 per valuation, with additional revenue from advertising.
• 😀 Patrick’s unique selling point is making antique valuation more accessible and less intimidating for customers.
• 😀 The Dragons express concerns over the financial model, questioning the sustainability of paying experts £80 per valuation while charging customers £450.
• 😀 Patrick highlights that repeat customers, who use the service multiple times, contribute significantly to revenue, offsetting lower initial customer spending.
• 😀 Deborah Meaden questions the scalability of the business and its reliance on Google Ads, while Patrick mentions that word-of-mouth is increasing demand.
• 😀 Patrick is rejected by three of the Dragons, including Duncan Bannatyne, who feels the business model is not investable.
• 😀 Theo Paphitis and Deborah Meaden ultimately offer £100,000 for 40% equity, agreeing to partner with Patrick to expand the business.
• 😀 After some negotiation, Patrick agrees to the deal, with an option to reduce his equity to 30% if he meets specific targets, securing the investment needed to grow.

Q & A

What is the core business idea presented by Patrick Van Devost?

Patrick's business idea is an online platform called ValueMyStuff.com, where users can upload photos of their antiques and receive valuations from freelance experts within 48 hours.

How much investment is Patrick seeking and what equity is he offering in return?

Patrick is seeking £100,000 for 20% equity in his business, ValueMyStuff.com.

What is the revenue model for ValueMyStuff.com?

The revenue model is based on charging £4.99 per valuation. Additional income is generated from advertising, with the expectation of 100,000 unique visitors per month.

What challenges did the Dragons point out regarding Patrick's business model?

The Dragons pointed out several issues, particularly the unsustainable financial model of paying experts £180 per valuation while charging £450, as well as concerns about the high cost of Google Ads and the business's under-capitalization.

How many unique visitors does Patrick currently have per month, and what is his conversion rate?

Patrick’s website currently receives 20,000 unique visitors per month, with a conversion rate of 3.6%, resulting in around 720 customers per month.

What is the average transaction value on the website?

The average transaction value on the website is £450, with customers typically paying £4.99 per valuation.

What is the main concern raised by the Dragons regarding the pricing structure?

The main concern was that Patrick is paying experts £180 per valuation while charging £450, which seems unsustainable and may lead to financial losses for the business.

Why did Duncan Bannatyne and James Khan decide not to invest in the business?

Duncan and James both decided not to invest due to concerns about the business’s financial viability, particularly the high cost of Google Ads and the unbalanced pricing structure that made the business model appear unsustainable.

How did Theo Paphitis and Deborah Meaden respond to Patrick's pitch?

Theo and Deborah both expressed interest in the business, agreeing to make an offer of £50,000 each for 20% equity, offering their expertise to help grow the business, particularly in digital marketing and advertising.

What deal did Patrick ultimately agree to, and why was it significant?

Patrick ultimately agreed to £100,000 for 40% equity, which was a significant concession compared to his initial offer of 20%. He accepted this to gain the valuable business expertise and connections from the Dragons.