Tonight's Dragons' Den saw one of the most monumental deals ever as Steven Bartlett offered one entrepreneur an opportunity that was so much bigger than an investment. The episode, which marked Touker Suleyman's final show, welcomed Caleb Slater, who founded the website Cards for Cash when he was just 16-years-old after buying and selling items on eBay to raise enough cash to set up his own business.
The Business Model
The premise is simple: sellers get an instant quote for their unwanted gift card. If they're happy with the offer they send over the details, the card is verified and listed on the website at a discounted rate. Once a customer has used that gift card the initial owner gets their payment.
'Going into the den I'm really really excited but I'm also really nervous as well,' said Caleb, now 18-years-old. According to the teen businessman, an estimated £480million worth of used gift cards expire unused every year so he asked the dragons for £50,000 in return for a 10% stake in his company which is tapping into that wasted cash.
Concerns Over Margins
But the dragons were concerned when Caleb revealed the small margins. Last year Caleb turned over around £500,000 but only took home £6,000. 'This sound like a really great service so why isn't it bigger?' asked Deborah Meaden, who in last night's episode invested £100,000 into a revolutionary solution to women's toilet queues.
Caleb, who was still working full time in IT support, explained: 'I think it's knowledge that a service like this exists because I've spoken to many people who have said they want to sell a gift card and I'm like, "You can sell it online and use my website", but people are like, "I never knew that existed."'
'I hate gift cards,' said guest dragon, Gary Neville. 'The people who received them, I always think don't always get a gift they'd appreciate. I can see why people have gift cards for a retailer that have no thought going into it and if they can turn it into cash that would be a no-brainer. I think it's really clever.'
The Unprecedented Offer
The margin issues proved too much for Deborah, but Steven Bartlett completely changed the game. 'It's a lot work but it's just perfect for me,' he began. After a pause, he continued: This is an offer. I would like you to come and work at our office in central London. We have an incubator floor where have founders like yourself who are working on their own businesses.
'The offer is to leave your job, I'll pay you the London equivalent – so it will be slightly more than what you're being paid now – and I'll give you the £50K investment for 33% of the business.'
Touker came in with his own offer to team up with another dragon to split a 30% share in Cards for Cash. Luckily, he found that dragon in Gary who called Caleb 'beyond good'. But even the possibility of two dragons isn't enough to lure Caleb away from Steven whose life-caging offer just couldn't be rivalled.
Shaking and leaving the deb, Caleb said: 'It felt a bit surreal, to be honest. I can't quite believe it at the moment, I'm honestly thrilled and chuffed to bits.'
Dragons' Den is available to stream on BBC iPlayer now.
