Entrepreneurs who fail to snag needed capital from angel investors at events such as the upcoming April 19 Angel Forum can still achieve success through persistence, hard work and creative thinking.
New doors can open when an entrepreneur makes public the fact that an enterprise needs money.
Abbotsford-based Joel Primus had no money and one underwear style that wasn’t even in stores when venture capitalists on CBC’s Dragons’ Den rejected his pitch for funding.
Now, Primus’s Naked Boxer Brief Clothing Inc. generates six-figure revenue annually by selling underwear that he contracts to have manufactured in Vancouver.
Retail chains such as Holt Renfrew, Top Drawers Apparel and Boy’s Co. now sell Primus’ three underwear styles in both black and white for about $44 each.
Dragons’ Den investor Arlene Dickenson offered to buy half of Primus’ venture for $75,000 if the other “dragons” would combine to chip in another $75,000. They did not. So, Primus walked away empty-handed back in May 2009.
Aviation consultant Ross Brown saw the show and was impressed enough to invest in the company.
Brown introduced Primus to WestJet Airlines Ltd. (TSX:WJA) co-founder Tim Morgan, who then also invested money in Primus’ venture.
“Before it was a dream – a long fight,” Primus told Business in Vancouver. “Now, it’s totally different. Our sales are taking off.”
Fuelling that sales flight will be a new line of T-shirts made with what Primus touts as the world’s softest fabric.
Selling underwear is a tough business.
Vancouver-based Ginch Gonch founder Jason Sutherland found that out in July 2008 when Montreal’s New Equity Capital bought his company after it had filed for bankruptcy and was looking for new owners through Vancouver insolvency consultants D. Manning and Associates.
The price of the acquisition was not disclosed but New Equity’s website notes that the firm makes initial investments of between $500,000 and $5 million.
Sutherland similarly had failed to attract investment from Dragons’ Den investors long before his insolvency.
“I have no regrets on anyone who I have passed on the chance to invest with,” Boston Pizza International Inc. owner and angel investor Jim Treliving recently told BIV.
“One or two have contacted me afterward and said, ‘I still want you in the business.’ Often, I’ve said, ‘I don’t think at this point you need me.’ Sometimes they just need a loan.”
Sometimes entrepreneurs have used the Dragons’ Den as a way to boost brand awareness and are confident enough to walk away from an offer that they believe is substandard.
Oswaldo Koch did that on an episode that appeared in October 2007 (See “Angels turn into dragons for B.C. entrepreneur” – issue 936; October 2-8).
He rejected dragon Robert Herjavec’s $300,000 offer to buy 100% of Koch’s Master Moves. Koch then capably built his business from an office on West Second Avenue.
Much of Koch’s anticipated $500,000 in 2011 sales will come through the Shopping Channel but he expects sales to also increase thanks to an agreement with distributor Fitness Quest.
Owners of recent Dragons’ Den reject Suit Sak Marketing Corp. have also seen a revenue boost as sales rise for their knapsacks which are designed to carry suits. Suit Sak founder Chris Thom failed to impress the dragons in the summer of 2010 on a show that aired in early in 2011.
Dragon Kevin O’Leary, who also appears in the American version of the show, Shark Tank, derided Thom on the show for being simply a man with a bike and a bag.
Thom told BIV in March that he has since racked up $115,000 in sales through his website, an Australian distributor and retail chains such as Moore’s The Suit People Inc.
“Someone just contacted us the other day about the U.K. and the U.A.E.,” said Thom. “So, basically, we’ve gone from what O’Leary said – a guy with a bike and a bag – to a real business in nine months.”