I was on GM-TV this morning with Hamfatter, the band Peter Jones invested £75,000 in on last night’s Dragon’s Den, for a 30% share of their future earnings. It made me muse on the nature of the investment…
If this were a non-televised programme, would they have invested in a band? Bands’ sales are driven by publicity, and here’s a group getting 9 minutes of 6 million audience prime time exposure by the very act of pitching, plus ensuing publicity on GMTV’s This Morning. Apparently they’ll now also be ‘debuting their first single on Chris Moyles’ show’ (and they’ve even got me blogging on them!). So why not invest with this expensive publicity already given?
This publicity issue doesn’t just hit bands though, it works for many retailers. I know the owners of Degree Art who pitched on the first series of the Den. They didn’t get any money (they got an offer, but turned it down due to the high share of equity wanted), but they came out of it well; the ensuing publicity was really helpful.
So in many ways, the programme itself is self-fulfilling, and there is a creeping feeling that many companies now go on it just for the publicity. You often hear the Dragons ask “you don’t need the money, why are you here?” While the standard reply is “for your expertise”, perhaps underneath there’s occasions where the real answer is “for the prime time BBC2 exposure”.
Not that this is a problem. It’s great television, which is of course its prime purpose, plus it teaches people about entrepreneurship and businesses and I’m a big fan of that. So much so I put it in my Teen Cash Class guide, in the section about one of the core lessons to learn; that a companies job is to make money from us.
“If you didn’t think that handling your money well was about a battle between you and the companies, hopefully, by now, you’ve cottoned on.
Don’t take just my word for it though, if you’ve ever watched the TV programme Dragons’ Den, take that as further proof. They never ask “how much good will it do society”, their key question is “will it make me money” – that’s the first priority of any business. There’s a reason it’s not called Fluffy Bunnies’ Den.”