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Eco-logic in the Dragons' Den

Dragonsden2007 Still one of my favourite business programs is BBC's Dragons' Den. Budding 'entrepreneurs' looking - sometimes with absolutely no business feeling at all - for private investors to launch or grow their business. And the investors - the Dragons - come from high standing: all successful business persons on their own.

Entering the Dragons' Den is IMHO a feat on its own and the worst (or best) you go away with is some proper business advice.

Yesterday two clever guys entered: JPM Eco-Logistics, Jerry Mantalvanos and Paul Merker wanted £100,000 for 20% of the business. The business is a haulier company, using trucks made from reclaimed materials and driving on 100% bio-diesel. Hence the name Eco-Logisitics.

The new buzz-word: eco-friendly, eco-logic, eco-logistics, it really doesn't matter what the second part is as long as you seem to be doing something to save, sustain or better the environment. Big money!

In the end, after first James Caan and Duncan Bannatyne teamed up offering the £ 100.000 for 45% of the business,  Theo Paphitis and Deborah Meaden put in a lower bit asking for only 40% of the fledgeling business. That offer was happily accepted by the two budding entrepreneurs.

This is what I saw happening:
Theo, a 'retailer' owning a 350 store chain,  didn't see an investment; he saw cheaper freight costs for delivers to and from his 350 stores and the fashionable label he can splash on everything now: Eco-friendly delivered - i.e. increase his prices a bit.

Jerry and Paul didn't see an investor; they saw a new and important, influential client with 350 stores nation wide.
Their own answer to Evan Davies when he asked if they hadn't given away much more than they had in mind (40% versus the original 20%) sealed my opinion:

"No, not really. We had our maximum of course, but as long as Theo would come on board we were willing to give in."

Double eco-logic whammy. Clever!

Related article: Dragons Den - short window for profit?


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