Dragons’ Den Update – Country Chic Paint in the Den… what really happened?
Do you want to know more about what really happened in the Den? Maybe you’re curious about what the future will hold for Country Chic Paint. Read all about it right here!
Our pitch on Dragons’ Den aired Wednesday night and we are so excited that we finally got to see how the segment turned out and to share our great experience with everyone! If you missed it, you can view the episode on the Dragons’ Den website. Please note this is only available for Canadian viewers due to licensing restrictions. US residents might search YouTube for the segment. We were in Episode 4 of Season 10.
We celebrated that night with a viewing party with some of our local customers, friends and suppliers. As the episode aired, it was exciting and slightly nerve-wracking to hear what the Dragons and show host, Dianne Buckner, had to say about our company. The Dragons were all very friendly and we knew their comments would be generally positive, but we still had no idea how our pitch would look after editing.
The ten minute feature of our pitch in the episode, was only a small portion of what happened in the Den. We were in there for what felt like an hour, but it was maybe only thirty minutes. A lot of the questions the Dragons had for us, were cut out of the final episode. It was also interesting that, after editing, some of our responses were put out of context; it was funny to see some of our responses didn’t necessarily make sense in the way the episode portrayed them.
If you’re curious about the detailed story of how we ended up on Dragons’ Den, you can find it on our blog where we describe our journey to the Den.
Once we found out we were going to face the Dragons, we made our way to Toronto ready with our pitch. We were filmed in the afternoon on April 14th at CBC’s downtown studio. There were four other pitchers there with us, but we have yet to see their pitches air. It was made very clear to us that even though we were filmed, our pitch might not make the final cut, so we are very grateful that our pitch made it on TV. So far we have not seen the other pitchers on TV that were there with us, but we hope to see some of them back in later episodes.
Before it was our turn to pitch to the Dragons, we were brought to a backstage area of the studio. A camera was pushed into our faces to get our reaction before entering the Den. We waited nervously for an extra fifteen minutes while the Dragons took a little break.
When it was finally time to go in we were really quite nervous, as you could probably tell! We faced the five stern Dragons, but within seconds their faces turned into welcoming smiles. What aired on TV was only a small snippet of what actually happened. After our one-minute pitch, the Dragons had so many questions for us; sometimes three of them were asking questions at the same time! This left us not knowing who to answer first and just trying answer them all as best as we could. They kept firing question after question, about our backgrounds, company financials, what our vision for the company is and our plans for the future. Some of the answers you saw us give on TV, did not match the questions it looked like the Dragons asked us, but that’s television editing for you!
We felt we had prepared very well for every question they asked; there was not a single question we didn’t have an answer for. What we had not prepared for however, was negotiating with the Dragons. We simply hadn’t expected to receive multiple offers. That may have been silly; we know we have a great company, but we didn’t expect the Dragons to be so interested in the niche market that we are in.
Within five minutes Jim had made his first offer: $100,000 for 20% of our company. At the end of our pitch, we were fortunate enough to get three different offers from the Dragons; one from Jim Treliving, of Boston Pizza, one from Michael Wekerle for a royalty and then one from Jim and Joe Mimran together! After receiving the offers from Jim, Joe and Wek, we decided to step into the Rat Pit to discuss our options.
We knew we were not interested in a royalty deal, because the investor usually isn’t interested in the company doing well as they will just take their cut from the sales. So regardless if the company generates a profit, the investor gets paid. We love Wek and his offer was very generous, but we didn’t think that was the right deal for our company.
We were intrigued by Jim and Joe; we loved their deal. Out of all the Dragons, it was those two who we were really interested in forming a partnership with. The only hitch was we just didn’t think that our sales warranted cutting our valuation in half. We felt our valuation was realistic and based on current sales – not on forecasted sales as Joe says in the episode.
Upon returning from the Rat Pit, we issued Jim and Joe a counter-offer to bring the valuation closer to what we had come in asking for. Jim and Joe, declined our counter-offer and came back with another offer for more money and more equity. Since we weren’t in there for the money, but for the expertise, we didn’t think this would be in the best interest of the company.
In the end, we decided to take Jim and Joe’s offer of 20% for $100,000 because we realized that their contribution to our company could be hugely beneficial. We liked that Jim agreed with our strategy to not go into big box stores like Michael’s. He shared the belief that our products should be sold and promoted by independently-owned retailers. We believe they are better ambassadors for Country Chic Paint than box stores because they use the product themselves and have a wealth of first-hand knowledge and experience.
Being on the show was quite the learning experience and we were thrilled to walk away with a handshake deal from two great Canadian businessmen! We are so grateful for the amazing support from our staff, and our customers across North America and we are so excited for the future of Country Chic Paint!
That’s it for now, but stay tuned because next week, we will post an update about life after the Den and how things have progressed since the airing.
P.S. Check out this article about us in the Financial Post!