Whilst the Dragons stake their reputations on identifying smart investments, they missed out on a 100 times return on their money when they sent Shaun Pulfrey away empty handed.
Branded his idea ‘hair brained’ as his hairbrush is now sold in 70 countries, used by the rich and famous and boasts an annual turnover of more than £30million it is the biggest company ever to pass through Dragons’ Den in its ten years on air.
The creator of Tangle Teezer, a brush specially designed to glide through knotted and tangled hair, was turned down for £80,000 in exchange for a 15 percent stake in the business in 2007. Fast-forward eight years and the company, for which Mr Pulfrey is the sole director, is now valued at £65million, meaning an investing Dragon could now have walked away with an £8million boost to their fortunes.
The product now boasts a number of celebrity fans, with stars from Victoria Beckham and Cara Delevingne to Emma Watson and members of the Royal family all reportedly using them.
Rather than spotting what is the best opportunity ever to have been pitched to them, the panel – then consisting of Peter Jones, Duncan Bannatyne, James Caan and Debroah Meaden – berated former hair colourist Mr Pulfrey and sent him on his way with nothing.
Jones branded his product ‘hair brained’, Caan called it a ‘waste of time’ and Bannatyne said it made him want to ‘pull my hair out’.
Despite this shaky start, Pulfrey said he would not change anything even if he could and believes he has done better without the Dragons than he would have done with their input.
Speaking about his decision Pulfrey said: ‘Entrepreneurs do things differently. Businessmen are less likely to take risks and I think you can see that with the Dragons. Looking back on it there really isn’t a lot that I would change.
‘At the end of the day, for me, I gained a lot of expertise from it and it has helped bring together the great team I have now. Fast forward to now and we’ve just turned over £23.4million, the forecast for this year is that we’re going to hit £34million.’
After his Den rejection Pulfrey re-mortgaged his two bedroom flat in Brixton to raise £25,000, which kept the company going for six months. While he still owns the flat the mortgage is now fully paid off and he now lives in a plush house in Clapham, London.
While the Dragons did not recognise the opportunity, the general public did and when the show aired, the company’s website crashed due to demand, with 1,500 orders being placed. Pulfrey said he saw this as ‘affirmation’ that the Dragons were wrong and that he should press ahead.
The success has continued to grow. In the year to March 31 2013, the company reported a turnover of £8.5million, this jumped to £14.4million the following year. In the 12 months to March 2015 this had risen again to £23.4million and the projected total for next year is £34million.
Paul Herman, business partner of former dragon James Caan and CEO of Bluebox Corporate Finance, said: ‘The Dragons have missed out on turning their £80,000 into somewhere in the region of £8m, a 100 times return on their money and a 95 per cent “annual” return on their original investment.’
Levi Roots’ Reggae Reggae Sauce, is the most famous of the businesses to have emerged from the Den. Appearing in 2006, he was seeking £50,000 in return for a 20 percent equity. He eventually walked away with the money after handing over a 40 percent stake to Peter Jones and Richard Farleigh. Farleigh however left the business after a few months with Jones buying his interest for twice what was originally paid.
Our recent interview with Keith Graham, the guitar strumming founder of the Levi Roots sauce, identified that he and Peter Jones’ company now turns over £60million worth of Reggae Reggae products creating a £30M fortune for the Jamaican who entered the Den with barely enough money to pay for the taxi fare to the studio.
