by RICHIEMACK on JULY 31, 2011 - 1 Comment in energy
The BBC’s top-rated TV show Dragons’ Den gave a cautious thumbs-up to Solar in the first show of its new series. But the valuation they placed on the solar panel company in question was disappointing.
Chris Hopkins, owner of Ploughcroft Solar gave his sales speech to convince the panel as to the benefits ofsolar energy, and the financial rewards that can be reaped from the Government’s feed-in-tariff (Fit) scheme.Seeking £100,000 for a 10% equity share in his company, the entrepreneur received offers from all but one of the Dragons. But the eventual deal was so low as to be almost derisory. (See the pitch here)Whilst Peter Jones remained unconvinced that enough homeowners would be able to invest the £15,000 needed to install the solar panels – despite the annual financial rewards – it was left to the remaining Dragons, Duncan Bannatyne, Theo Paphitis, Deborah Meadon and Hilary Devey to fight over a stake in the business.In the end, Deborah Meadon and Theo Paphitis managed to secure the deal by teaming up to offer Mr Hopkins £100,000 in return for a 12.5% stake each.
this valued the company at just £400,000, or to put it another way – just 40% of what Chris Hopkins had been looking for.
Mr Hopkins established his company 13 years ago, and has plans to open seven new branches of Ploughcroft Solar across the UK. He has already joined forces with high street electrical retailer Plumb, to provide solar panels to households across Yorkshire and Humberside.
So the Dragons were fully valuing their own contribution (ie their high profile thanks to Dragons Den).
Mr Hopkins might have been better advised to have accepted only £50,000 for 12.5%, thereby leaving myself more of the equity for a later round of investment.