I’ve been watching the new CBC show Dragon’s Den, and I’m concerned by the examples being set for any entrepreneurs watching or participating.
Anyone who thinks this show has anything to do with real business angel investing is probably smoking the same stuff as Peter, Paul and Mary.
Now, for those who haven’t seen the show, the basics are that entrepeneurs pitch five wealthy business angels for investments (with the angels cast as Dragon’s protecting their money from entrepreneurs with bad ideas and dolling it out to promising startups).
The Dragon’s then make an offer for an amount of money & share of the company or send the entrepreneur packing. From an entertainment point of view, it’s a fun show. I enjoy the American Idol – William Hung factor of watching some really bad business pitches as much as the next persion.
I’m also of the strong opinion that anything that helps promote an entrepreneurial spirit in Canada is much needed and welcome.
That being said, there is a lot about raising money from angel investors that isn’t well suited to the format of an entertainment show. Aspiring entrepreneurs might be confused about what lessons to take away from the show.
This weeks episode where Toronto based Jobloft gave up a 50% of their company for a $200k investment was the turning point for me. The company flat out got bad advice somewhere along the way and as a result were mauled by the dragons.
Sean writes that all contestants were coached by either his firm Wise Mentor Capital or Pierre-Luc at Ignite Partners. After what I’ve seen on the first three episodes I really question the quality of the advice they are getting.