What is the role of an early stage investor? I was reminded of that question when watching Letitia and Alex the young couple who made the Survivor Jak a replacement for the survival jacket who presented on the Den this evening.
I could easily understand if viewers wondered sometimes on what basis the Dragons make their decisions. Early on in her presentation Letitia made a remarkably uninformed comment: that more than half the British population were "walkers" by which she meant "hikers" or "ramblers".
But of course more than half the population are not the kind of walkers that might need a survival jacket and it was glaringly obvious to the dragons that she had completely missed the point.
Entrepreneur Doug was a Dragon from 2005 to 2007.
The mistake itself wasn't the issue for them. For Peter and Theo it was a signal that she didn't have the nous to be an entrepreneur.
They assumed, I suspect, that if she managed to make such a simple mistake as that, she would make other mistakes of equal issue in the future.
Doug on the programme
But was it a fatal error? After all, her product had some offsetting accomplishments. Unlike many products in the Den, this product was already being manufactured and it had already been ordered: what appeared to be a substantial distributor had ordered 10,000 units.
The value of an initial order should never, ever be underestimated. Almost all of the biggest risks of a new product circle around whether or not it will be accepted in the market at all, and, even if there is demand, what the path to the market will be. Many great products have died a silent death because they could not find a way to let the world know about it. A significant order by a reputable distributor sweeps those risks away.
Deborah, bless her soul, clearly saw this. She accepted the weakness of the team and the strength of their position and saw what I think more angel investors have to see: that it is impossible to make a bad product good but it is quite possible to coach and mentor young entrepreneurs to become great. I was heartened by her investment.
Last updated: 23rd August 2010. Follow Doug on Twitter @dougrichard
These are the views of Doug Richard, not those of the BBC
Each week in the 2010 series Julie Meyer and Doug Richard offered their take on some of the key moments from the TV Den.
Week 1: Kirsty, the Best of Britain
Week 2: Called to account
Week 3: Where pitches go wrong
Week 4: A school for entrepreneurs
Week 5: Why evaluation matters
Week 6: When coup de foudre happens
Week 7: The role of an early investor
Week 8: What finishes a pitch
Week 9: Unlocking an investment
Week 10: Lessons from the Den
Missed any action? Watch, read, rate and have your say on the class of 2010.
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