House Crowd got slapped down on Dragons Den

[HighlandTiger]

Got an email from House Crowd, thought I'd share it with you guys.

 

 

Hello Highland Tiger,

 

As you may be aware we were on Dragons Den on Sunday night. 
  
In April this year, we had already been considering whether or not to raise more money to fund expansion when Dragon’s Den contacted me and invited us to be on the show. 
  
After much careful deliberation we considered it was a good opportunity to explore another potential investment angle for the business though we knew it was highly unlikely they would invest given that we were asking for £1M - a sum 4 times more than they have ever invested. 
  
We believed that the publicity and extra business an appearance on such a show can generate, even if the Dragons were negative about such a pitch, would be a worthy undertaking; the experiences of Trunki and the Tangle Teaser being examples of just two businesses the Dragons rubbished that went on to be extremely successful partly as a result of their appearance on the programme. 
  
We fully anticipated the attack on our valuation and unfortunately much of what I said in support of it was edited out.   
  
On the basis of Peter Jones’ analysis (who did actually say he liked the idea) using a traditional valuation model, companies like Facebook, Google,  Amazon, Funding Circle (and indeed his co-Dragon Nick Jenkins’ Moonpig) were worthless when they received (hundreds of) millions of pounds worth of investment. He is well aware of that and the way fast growth companies, particularly crowdfunding companies like The House Crowd are valued... but recognising that would not have made for good TV. 
  
Whilst it was a tough experience, Dragon’s Den has been a fruitful exercise; we have received an influx of web traffic (over 3000 extra visits so far) and, bar a few detractors, which is to be expected, the response has been overwhelmingly positive. 
  
Despite the Dragons deciding not to invest we have plenty of interest from potential investors - including several angel investors who have contacted us since the show - and are confident we will raise the investment we are looking for when we launch our share offer. The revised paperwork is with the lawyers and we hope to be able to release the offer within the next few weeks along with a full business plan.  

Best wishes 

Frazer

[Melon]

Just watched it, got to say I think the dragons were pretty ridiculous. I can completely understand why they would question the valuation, but the rest of it was just silly. To not invest because people might think property is a safe investment - what? To be offended that he would consider an offer rather than blindly accept it - huh? 

 

The valuation may be a bit silly (I'm no expert), but the dragons seemed to be shooting down the idea of investing in property most of the time rather than anything to do with the House Crowd platform.

[KDave]

Just watched the episode on BBC iplayer. They were ruthless with the bloke but like he has said in his email to HT there is no such thing as bad publicity.  

 

Link to episode - he comes on about 31 mins in;

 

http://www.bbc.co.uk/iplayer/episode/b062r0nm/dragons-den-series-13-episode-1

 

Personally I have no investment in this company and don't intend to get involved, but it is an interesting idea and did perk my curiosity to do a bit of research into it. Each to their own, DYOR and all that. 

[Guest]

The whole thing was premeditated as a publicity stunt..

If I was a dragon I would have thrown them off the program.

[Pipers]

I watched it, those dragons who mainly made there money from money lent by the banks now verbally strut up and down like a cockerel in front of his hens.They go around bashing business owners who used to be able to get loans but can no longer get them because banks do not lend to business any more. The so called Dragons ( greedy rip off bastards) have never lent money on anything near reasonable terms.  

 

They get very easily offended 'taking money from my children' as if they haven't taken money from other peoples children and 'how dare you come in front of me today without the figures' as if they are so important as to be the rulers of a medieval empire.

 

Right getting to the crowed funded housing business.  To be honest I think its not a business I would invest in as I stated in the said thread, nothing to do with valuation but I believe the housing market is at the top and is being kept there by the Government.  That said it does not mean businesses cannot make money, they can.  

 

It obviously is a high risk business and investment must be kept to a minimum.  You could see big rewards or loses.  

 

One other matter I would be worried about if I had invested in the business, the housing market is hot right now so why is the company having problems finding investors??  Don't be fooled by the letter, if investment was in place then he would not of gone on the Dragons Den.  

[Melon]

I watched it, those dragons who mainly made there money from money lent by the banks now verbally strut up and down like a cockerel in front of his hens.They go around bashing business owners who used to be able to get loans but can no longer get them because banks do not lend to business any more. The so called Dragons ( greedy rip off bastards) have never lent money on anything near reasonable terms.  

 

They get very easily offended 'taking money from my children' as if they haven't taken money from other peoples children and 'how dare you come in front of me today without the figures' as if they are so important as to be the rulers of a medieval empire.

 

Right getting to the crowed funded housing business.  To be honest I think its not a business I would invest in as I stated in the said thread, nothing to do with valuation but I believe the housing market is at the top and is being kept there by the Government.  That said it does not mean businesses cannot make money, they can.  

 

It obviously is a high risk business and investment must be kept to a minimum.  You could see big rewards or loses.  

 

One other matter I would be worried about if I had invested in the business, the housing market is hot right now so why is the company having problems finding investors??  Don't be fooled by the letter, if investment was in place then he would not of gone on the Dragons Den.  

 

Well it depends on if you think he went on dragons den for the money (unlikely, his valuation of 1m for 5% was never going to happen), or publicity. Publicity is usually good, although in this instance it didn't work out great.

 

As for a risky business, in a way that's the genius of The House Crowd. All the risk is on Joe Bloggs buying chunks of the houses. The company itself just collects it's fee and holds no debt - easy money really.

[Investor1989]

I miss some of the old Dragons, particularly Theo Paphitis and James Caan,

[Scuzzle]

Dragons Den was better when it first aired and it was always some random guy who invented something in his shed and thought it could go further.

[Investor1989]

Dragons Den was better when it first aired and it was always some random guy who invented something in his shed and thought it could go further.

Don't we still get garden shed inventors on the show?

[Scuzzle]

Not so much now, it's more established businesses many web based with a variation on an existing theme, it's all very 'samey' now.

[sovereignsteve]

Don't we still get garden shed inventors on the show?

Ridiculous. Everyone knows the garden shed has already been invented!

[daz]

Not so much now, it's more established businesses many web based with a variation on an existing theme, it's all very 'samey' now.

I agree I've been saying the same for the last couple of series, used to watch it and think that's a good/crap idea , now you just get kids dance and theatre club franchises

[HelpingHands]

I watch 'Fake or Fortune' on t'other side.