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Posted: **Tue Aug 18, 2009 10:36 am**

Has anyone else seen this show? It's very interesting and disgusting at the same time.

The show has people coming on to ask these investors for money in exchange for a stake in their company. There are 5 investors and they can work together or bid against one another.

They don't pull any punches and will tell someone that their idea, product, or company is shit. This past Sunday a lady was on trying to pitch a little pad that fit on laptops and desktop monitors that was sticky so you don't lost post-it notes. There was only enough room for 2 post-its on the pad, and honestly, who is losing post-its that they need this thing?

Anyway, the show is interesting in terms of how business works.

What's disgusting (yet fascinating) is watching the sharks fuck people over. These people come on this show with zero business knowledge, but a marketable product. If the sharks see a good idea, they rarely get into bed with the person unless they grab control of the company or product.

All the offers from the people start off the same way: x amount of cash for 10-20% equity in the company.

The sharks always counter with that x amount of cash and 51% - 100% of the company.

This past Sunday a guy came on asking for $250K and offering 10% equity for a product he designed to teach kids stuff in school via music. His first work was all the Shakespeare plays in the form of folk sounding songs. (Personally, I think the product sucks. Imagine you're in high school and the teacher puts on a CD with some clown singing a slow song about "Romeo and Juliet". Who doesn't fall asleep to that?)

The sharks all LOVED his idea and all agreed to be a team and make a single offer to him. Their offer was $250K, 100% control of this guy's company, and he gets 5% royalties for the rest of his life. Not only did the guy take that offer, but he asked to be able to buy his way into the company as the 6th partner. They agreed, but only after he paid back the initial $250K (WTF? He has to pay them back the purchase price of his own company?).

After this guy left, one of the sharks was laughing at him talking about how he cannot believe he went for that deal as it was so bad.

What's worse is that "shark" broke away from the group momentarily and offered this guy the $250K and he only wanted 51% of the company. The guy turned it down because he "felt better about being in business with 5 partners rather than just 1." Again, WTF?

Maybe disgusting is the wrong word as I don't think it fits, but it's definitely a negative feeling to watch the show. Still it's one of those "I can't look away from the accident" sort of things.

Posted: **Tue Aug 18, 2009 10:42 am**

So... they're feeding dumbasses to sharks.

Posted: **Tue Aug 18, 2009 10:51 am**

Essentially, yeah. (At least they don't have lasers on their heads.) Although some are smart enough to walk away.

The big one this Sunday was a guy who designed a device that will not let a car start until the seatbelt is secured on any passengers (it detects if anyone is in the seats).

Combine "safety" and "kids" and you can see why this is just a brilliant invention. The guy owns everything to this device too in terms of copyrights and patents.

The sharks were going on and on about this thing. One even said "If we went into business together, I'd immediately take these to the car companies and we'd be very, very rich men."

Later, that same shark offered the guy $1,000,000 for ownership of the patent and no stake in any of the profits. Seriously? Is the guy supposed to forget that you just told him how rich he'd be doing it a different way?

The guy turned them all down and walked out without a deal.

I explained to Lindsay that it was another smart move on his part. The deals sucked, and while he could have probably negotiated something better, the exposure the product got is surely getting him a lot more phone calls.

Posted: **Tue Aug 18, 2009 10:58 am**

The $250K plus 5% royalties sounds pretty good, considering that the idea is crap. If the guy gave them back the $250K to buy in full share, that's where he shows he's an idiot.

Posted: **Tue Aug 18, 2009 11:23 am**

These people need to have me as an agent.

Or, bring a lawyer.

Posted: **Tue Aug 18, 2009 11:39 am**

Tod Wilson of Mr. Tod’s Pie Factory was first into the tank, he needed money to expand his business to meet demand. Although he ran a profitable retail pie business over 50% of his business came from wholesaling sweet potato pies, he had sales of over $850,000 last year. McDonald’s is interested in carrying his product in the southern states. He was asking $460,000 for a 10% stake in his business. Barbara and Daymond offered the money for 50% of his company and Tod accepted the deal.

I would have given him better terms than that.

I can't imagine he couldn't have gotten at least $200k through a business loan around 8%, and the other $260k against a $1 million valuation by giving up just 20% of his company.

Edited By TheCatt on 1250610288

Posted: **Tue Aug 18, 2009 11:42 am**

I watched this on the BBC version Dragons Den and yeah sometimes it seemed like people were getting screwed. I did read an article in popular science about being an inventor and I believe it said if you do sell your idea don't expect more then a 2-3% share or your idea.

What I don't get is why not go on the show with your idea and then if they don't offer you anything good but they want your idea turn them down and use the show as a free commercial to try and attract someone else.

Posted: **Tue Aug 18, 2009 1:25 pm**

The $250K plus 5% royalties sounds pretty good, considering that the idea is crap.

You don't spend all your free time and money making this crappy product without thinking it's a winner.

We know it's crap, but he doesn't and neither do the sharks.

What I don't get is why not go on the show with your idea and then if they don't offer you anything good but they want your idea turn them down and use the show as a free commercial to try and attract someone else.

People say no to them. Go back and read what I wrote about the guy who invented the seatbelt thing. I think he had a smirk on his face when he left because I think he was there for publicity.

Every single parent of a teen who saw his invention now wants one.

Edited By Leisher on 1250616455

Posted: **Tue Aug 18, 2009 1:54 pm**

My car already does that to an extent. If it senses weight on the front passenger seat and the belt isn't buckled, the car <s>nags</s> chimes every 30 seconds to remind you to buckle up.

I think a starter kill switch would lead to a lawsuit.

Posted: **Tue Aug 18, 2009 2:40 pm**

My car already does that to an extent. If it senses weight on the front passenger seat and the belt isn't buckled, the car nags chimes every 30 seconds to remind you to buckle up.

Mine has the beep, but it shuts off after a minute or two.

I think a starter kill switch would lead to a lawsuit.

Explain.

If the kill switches were an option that would could order on a car, who could they sue?

Posted: **Tue Aug 18, 2009 3:02 pm**

Sweet. I'll add "learn how to disable seat belt nanny device" to my list of skills.

Posted: **Tue Aug 18, 2009 3:40 pm**

Leisher wrote:
I think a starter kill switch would lead to a lawsuit.
Explain.

If the kill switches were an option that would could order on a car, who could they sue?

I dunno. Seatbelt mechanism breaks and peeps aren't able to escape from the machete murderer at Camp Crystal Lake because the car wont start?

Posted: **Tue Aug 18, 2009 3:49 pm**

No, the seatbelt doesn't "lock". The car just won't start.

But going with your point, there are accidents where seatbelts are bad, but nobody has sued for that yet.

Posted: **Tue Aug 18, 2009 3:51 pm**

I dunno. I'm just predicting lawsuits.

Posted: **Tue Aug 18, 2009 3:52 pm**

Malcolm wrote:Sweet. I'll add "learn how to disable seat belt nanny device" to my list of skills.

1) Go to car junkyard
2) Get buckle of same make of car for $1
3) Insert into your car.
4) ...
5) Profit.

Posted: **Tue Aug 18, 2009 3:54 pm**

Would probably be some cross-wiring needed when the device detects a dead circuit.

Posted: **Tue Aug 18, 2009 3:56 pm**

I didn't really look into the device to see how smart it was. I figured maybe it just used the current seat belt indicator, which appears to just know whether or not something's there, and doesn't have that level of sophistication.

Posted: **Tue Aug 18, 2009 4:00 pm**

New prediction: these devices will be mandated by the government (for our own good) and lawsuits will be impossible.

They are in the car making bidness, you know.

Posted: **Tue Aug 18, 2009 4:27 pm**

Not only are they in the car making business, but they will soon also run health care, so it's just good business.

Posted: **Tue Aug 18, 2009 4:50 pm**

Wow. Wouldn't it be neat if they decided car accidents cost more in health care after accidents than it is worth letting the "riskier" drivers drive...

There would certainly be a lot of insurance company actuary tables for sale.

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