Entrepreneurs who appear on the BBC show Dragons’ Den often face a tough decision: whether to accept an investment offer from one of the show’s wealthy investors. However, new research suggests that turning down a Dragon’s offer may not be the worst decision, as 65.4% of businesses that rejected an investment remain on the Companies House register.
This compares to 60.6% of businesses that accepted an investment and 41.7% of those that left the show without securing a deal. The research, conducted by SEO Agency Dark Horse, analyzed 1,232 pitches from the first 23 series of Dragons’ Den.
The Dragons’ Approval Isn’t Everything
While the Dragons’ approval appears to be associated with a better chance of survival than leaving empty-handed, the entrepreneurs who rejected an offer came out on top. The study found that 618 businesses remain on the register, representing 50.2% of the total.
However, it’s worth noting that remaining on the Companies House register doesn’t necessarily mean a business is thriving. A registered company might be struggling financially, dormant, or operating on a much smaller scale than its founders originally imagined.
The research also found that even when entrepreneurs and Dragons agreed to an investment on camera, the money didn’t always make it into the business. Across the 454 deals agreed in the Den, the total announced investment came to £34.7 million. However, only 207 deals, worth approximately £14.9 million, were recorded as signed after filming.
Questioning the Value of a Dragon’s Investment
As Libby Mayfield, Head of Marketing at Dark Horse, puts it: “Even when we see happy entrepreneurs shaking hands with business tycoons, once the cameras are off it’s still more likely that no money will change hands, as more than half of the deals agreed on the show don’t actually progress.”
The research found almost no difference in survival rates between businesses whose deals were recorded as completed and those whose agreed deals were not recorded as being completed: 60.4% compared with 60.7%, respectively. This complicates the idea that getting a Dragon on board is automatically a route to success.
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Some of the most successful businesses that appeared on the show didn’t even secure a deal. For example, Tangle Teezer, which was rejected in series five, now has net assets of £43.3 million. Concrete Canvas, which turned down an offer in series two, has net assets of approximately £5 million and employs 66 people.
Pasta Evangelists, which was rejected in series 16, is the study’s largest employer, with 382 staff. The business was sold in 2021 for a reported £40 million. These examples suggest that a “no” in the Den isn’t necessarily a verdict on a company’s future.
For entrepreneurs, the lesson is to understand what they’re giving up, what they’re getting in return, and whether the money will genuinely help them achieve their goals. It’s all about acknowledging the complexity of building a successful business, which is a considerably longer game. Sometimes, the most valuable thing a founder can do is know when to say no, and the decision to reject a Dragon’s offer may be a significant one in determining the future of their business, with £19.8 million in agreements for which the study found no record of completion.
This is a significant number, considering the company was once valued at £80,000. The founders’ decision to reject the offer did not hinder their ability to grow and expand their business.
This is a substantial amount, especially considering the founder was only seeking £50,000 in exchange for 25% of the company. The business has clearly thrived without the investment from the Dragons.
This example illustrates that a “no” from the Dragons does not necessarily mean a business is doomed to fail.
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