Appearing on Dragons' Den taught these entrepreneurs many hard lessons in fundraising. The most valuable? Rejection can be a blessing in disguise. Chris Nguyen, Lee Liu, Andy Lai and Sunny Mokha, Jobloft.com, Toronto Product: Online job board for retail workers The most memorable Season 1 pitch came from four young men in bright orange ties. The founders of Toronto-based JobLoft.com, four recent graduates of Ryerson University, were the only entrepreneurs to strike an investment deal with a syndicate of all five Dragons. And when the deal flamed out on prime-time TV, it provided an unexpectedly dramatic conclusion to the inaugural season. At first, the Dragons dismissed JobLoft.com as just another job board. But CEO Chris Nguyen insisted he had found a unique niche: targeting new workers looking for low-paying retail and service jobs. Plus, JobLoft uses Google Maps to help users find jobs close to home — since no one wants a 60-minute commute to a job paying $8/hr. Nguyen says he and co-pitcher Lee Liu aimed their presentation at the two retail Dragons — Laurence Lewin of La Senza and Jim Treliving of Boston Pizza — who understand the need to attract churning crowds of entry-level job-seekers. But the two technology investors — Kevin O'Leary and Robert Herjavec — were also keen. They persuaded the fifth Dragon, rancher and pilot Jennifer Wood, to join their offer of $200,000 for 50% of the company. TV viewers watched as Nguyen and Lee conferred with partners Andy Lai and Sunny Mokha. They were both disappointed and excited. They had hoped to raise $200,000 for 15% of the company, but the Dragons' enthusiasm — along with their promises to "accelerate" JobLoft's growth — was dazzling. They tried to counter-offer, but the investors snarled back. "It would be a huge mistake to let the dark forces of greed cloud your minds now," warned O'Leary. In the end, the entrepreneurs took the deal. "We're 23 years old," said Nguyen in their last-minute huddle. "The worst thing that could happen is that we all learn from the experience." Two months later, the Dragons and JobLofters met in Herjavec's Toronto office to close the deal. As revealed in the show's wrap-up episode, Ryerson business professor James Norrie, an entrepreneur and ongoing advisor to JobLoft, challenged the Dragons' marketing proposal — and called their investment "measly." The normally genial Herjavec snatched back the $200,000 cheque and tore it into pieces. The next day, Nguyen told his team, "We still have a business to run." Fortunately, Dragons' Den had put JobLoft on the map, and the phone had started to ring. "It's a good thing we didn't take the $200,000," says Nguyen. Prior to the taping, the founders were all working for free and clients were still enjoying free-trial job postings. Today, some 30 clients pay fees ranging from $200 to $30,000, and Nguyen says sales in the second quarter of this year were 70% higher than in the first. The JobLofters have met with a few investors, too, but are waiting to find the right fit. At press time, they were negotiating with one venture capitalist for an equity injection to help fund their entry into the U.S. Clearly, the JobLofters' expectations have risen along with their revenue: today, a deal such as the Dragons rejected would cost "seven figures, plus," says Nguyen. But they don't wear those ties anymore.
Life after No: The ties that bind
Intro | Dragon attack | Life after no | Playing with fire | Season 1 |
Originally appeared on PROFITguide.com
FILED UNDER: ProfitGuide startups