Infighting, tax evasion and dodgy deals: The dark reality of Dragons’ Den

By on April 30, 2014

Many entrepreneurs have been left battered after appearing on the hit BBC series. Are the show’s days numbered?

A star of the show once tried to buy a baby. Another branded his wife a gold-digger in front of millions. A further character stood accused of using public money to fill his company coffers. These tales of infighting, tax evasion and dodgy deals are not based on the antics of JR of Dallas fame. This is real life, playing out on the hit BBC series Dragons’ Den.

Troubled investors

Part investors, part pantomime villains, the BBC’s ‘Dragons’ are as colourful as they are incredible. You don’t have to dig very deep to find dirt. Take gym entrepreneur and fiery Scot Duncan Bannatyne, whose financial woes have been played out endlessly in the media. The small issue of the collapsed Anglo Irish Bank last year got him booted out of the Sunday Times Rich List, yet he has managed to hang grimly onto his spot on the show.

James Caan left the show following bad publicity after his thwarted attempt to buy a baby from a starving family in Pakistan in 2010. Caan even managed to alienate Bannatyne when his non-domiciled-resident tax status was revealed. He became an instant persona non grata on the show, with Bannatyne vowing never to invest alongside him.

Baffling interview process

But the allure of the Den is still a mystery to some. While many entrepreneurs describe the pitching process as educational, all admit that it bears very little resemblance to a meeting with regular investors.

Captive Media attracted derision in the Den because it creates interactive branded content on proprietary screens installed in urinals. “They just kept going on about how it was a peeing game,” says co-founder Gordon MacSween. “I was never able to move the conversation on because they were locked into the novelty of it. You don’t get professional investors trying to come up with killer one-liners when you’re pitching, scribbling put-downs while you’re answering a question.”

The contestants on the show are all seeking investment, but the majority are also looking for mentoring and advice. Therein lays the problem. The success of the format rests on how well the Dragons make the entrepreneurs squirm. How can you establish a relationship of trust with an investor who has spent the first few hours of your meeting tearing strips off your business for entertainment value?

Success stories

There have been some notable successes. Levi Roots and his jerk sauce company, Reggae Reggae Sauce, were propelled to stardom following his heartfelt, tuneful pitch in the Den in 2007. The sauce is now stocked in all the major multiples in the UK.

But for every success story, there is a long list of entrepreneurs who, in spite of being summarily rejected in the Den, have gone on to make millions. Most notably, Rob Law, inventor of kids suitcase company Trunki. He now turns over more than R120 million a year, even though he was dismissed on the show.

Contractual issues

And while Steve Handley, the Beeb’s Dragons’ Den series producer, claims that around 20 percent of businesses that pitch on the show secure investment, there is evidence that many of the entrepreneurs don’t actually get the money.

According to recent research by alternative finance provider, which interviewed 553 previous contestants, more than a third of businesses that received an offer from the Dragons found that those deals later fell through for contractual reasons or because the Dragon retracted the offer.

It’s not just the Dragons who are refusing to sign on the dotted line. Start-ups are increasingly rejecting offers in the Den in favour of bank funding or other cash sources.

Bedlam Puzzles entrepreneur Danny Bamping accepted and later rejected an offer from the Dragons for 30 percent of his company, instead preferring bank funding.


The influence of so-called celebrity angels is now also being threatened by the emergence of countless new forms of alternative finance. Who needs three minutes of fame on BBC2 when a cleverly edited video on a crowdfunding site can go viral in hours?

While Dragons’ Den can attract as few as 1.5 million viewers, US-based crowdfunding platform Kickstarter receives 9.9 million visits a month globally, according to Quantcast. These aren’t passive visitors: they are armchair investors, pumping in $1bn of funding since the site’s launch in 2009. Its most funded project, the Pebble smartwatch, received more than $10m in funding from 69,000 backers. The largest investment ever made on the Den was £200,000.

While Dragons’ Den may be an easy way to get your product or service on TV, the pitfalls of appearing on a hackneyed show with self-interested investors and ‘if it bleeds, it leads’ editing are fast outweighing the benefits.

And with the rise of crowdfunding and the fast-eroding credibility of so-called celebrity angels, the death knell could soon sound for Dragons’ Den.

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