Could you say no to $90,000?

James Roupell: accepted and then shunned a cash injection for his business. Cast of the BBC show Dragons’ Den
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It was quite a U-turn. A successful small business that agreed to offers of investment on the Dragons’ Den program on the BBC in the UK, turned down the cash moments later in favour of a cheaper deal elsewhere.

Dragons’ Den is a show where entrepreneurs have three minutes to pitch their business ideas to five multi-millionaires who are prepared to invest their money in the best ideas.

In the show Dragons’ Den, James Roupell, founder of Bobo Buddies, received five offers of investment for his business. He accepted offers from Deborah Meaden and Peter Jones on the show but moments after leaving the studio, he regretted his decision.

“Standing there, surrounded by film crew and cameras, with all eyes on you, is so surreal,” he said. “You’re under so much pressure to make a decision. I was trying to think rationally. It was only once I’d left that I thought, ‘What have I done?’”

Mr Roupell had accepted an offer of £50,000 [around AUD$92,000] in exchange for a 40 per cent stake in his business, reducing to 30 per cent if certain targets were met. “They were very persuasive,” he said. “I hadn’t planned to give away nearly that much of my company.”

Bobo Buddies makes functional cuddly toys for kids. Its flagship product is a backpack that also combines a soft toy, pillow, and blanket. Its toddler version of the product comes with reins for parents.

Mr Roupell had the idea for his business in June 2012 while sitting on a plane. “I was surrounded by kids and there were soft toys and blankets strewn everywhere,” he said. “When I was small, my granny had sewn a blanket into my favourite toy and I suddenly thought, why don’t I start making these all-in-one toys?

“I couldn’t get off that plane fast enough.”

Bobo Buddies went from dream to reality in just six months. “I wanted to have the first stock in by Christmas,” said Mr Roupell. “The business launched in October and the first 4,000 units arrived a month or so later.”

He sold out of his first batch solely through trade fairs and Christmas shows, and managed to secure a huge order from Debenhams. “This is how I ended up in the Den,” he explained. “I didn’t have enough cash to buy the stock, so I needed £50,000 to accept the deal.”

As a new start-up, Mr Roupell couldn’t access the finance he needed from the bank. “It was so frustrating,” he said. “The money would have been back in my account just a few weeks later.”

He applied to the BBC’s Dragons’ Den and went through to the final stage of the program in March last year. All the Dragons offered to provide investment, but at a high cost. “They wanted 40 per cent of the business for what was essentially a short-term fix,” he said.

Having accepted a joint offer from Meaden and Jones, Mr Roupell left the studio and immediately called his mentor to find out if he’d made a huge mistake.

“I know some people from within the retail industry who help me out when I’ve had questions or problems. They are my sounding board,” he explained. “I explained my situation and to my surprise, most of them offered to help.”

Mr Roupell came to an agreement with one of his contacts to borrow the full amount and simply return it with a small amount of interest the following month. “The most important thing was that I lost no equity,” he said.

“A lot of people feel that they should bend over backwards for these big names in the Den. I felt that I could do it on my own and I knew I didn’t need to give up that much of my business. It was really important to me that I retain control of the business I built.”

When Mr Roupell told representatives for Ms Meaden and Mr Jones that he had decided not to go ahead with the investment, they were “reasonable about it,” he said. “I explained that I had secured the money for no equity stake and they wished me luck. They’ve even been in touch since to see how the business is doing.”

In the past year since the show was filmed, Bobo Buddies has gone from strength to strength. The company has now sold more than 20,000 units and supplies Debenhams, Harvey Nichols, Fenwick and 250 other retailers across the UK. Bobo Buddies are exported to eight countries and turnover has now hit £160,000.

Despite turning down the Dragons’ offers of investment, Mr Roupell said that going on the Den was a worthwhile experience. “It was a huge confidence boost to sit in front of these guys you see on TV and have them all want to invest,” he said. “And beating the targets I set out in the Den – by a long way – while keeping 100pc of my business has been extremely satisying.”


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