On the so-called Lenox Globe, one of the oldest known maps from the 15th century, there was a Latin inscription on one unexplored region that said “Here Be Dragons.” Maybe the CBC should have inscribed that over the stage door leading to their venture capital reality show The Dragons’ Den. A Toronto startup called JobLoft certainly got chewed up during the filming of the show — although there is some debate about who did the chewing, and whether they deserved it or not.
As Rick Spence outlines on his blog, the JobLoft guys got a $200,000 cheque from the four venture capital “dragons” — and a commitment that they would get lots of great advice and assistance — in return for 50 per cent of their company. On the final episode of the show last night, however, the company’s advisor (a professor from Ryerson) criticized the dragons and their offer, and the dragons tore up the cheque. Ryan Coleman of Clay Tablet has a video clip and some thoughts about the show.
A couple of things strike me about this situation. The first is that while all this makes for great TV, I’m not sure it’s a great way to raise money. In other words, it’s a sideshow. Just as going on Who Wants to Date a Millionaire isn’t a great way to find true love, Dragons’ Den probably isn’t a great way to find a good VC match. The JobLoft guys say on their blog that they’re glad of the experience and that it got them publicity, but in the long run I’m not sure that it was worth it.
A lot of people in the comments at JobLoft’s blog take them to task for blowing the deal, and argue that their advisor was wrong to confront the dragons, etc. Waiting until the last minute to raise concerns is certainly not a great approach — and I would agree with Kempton that the insults that their teacher lobbed at the dragons were also totally offside in my opinion — but at the same time the JobLoft guys note that they got very little face-time or input from the dragons, contrary to what was promised.
In the end, it’s also worth noting that $200,000 for half of your company seems to me like selling yourself pretty short (as Toronto entrepreneur Austin Hill noted in this excellent post on the show). Maybe it’s just as well they got out of it. Ben Yoskovitz has some thoughts too.