Stephen Likely of Springhill appeared on CBC’s Dragons’ Den, pitching alongside his teammates a hand cleaner that’s better than the leading competitors and landing a $200,000 investment.
SPRINGHILL – The last thing you want to hear on the television series Dragons’ Den is “I’m out.”
Luckily for Springhill High graduate and University of New Brunswick student Stephen Likley, when he and his team pitched a cleaning product developed by one of their professors they say is better than the rest, few dragons wanted to take a pass on the investment, and netted the upstart company $200,000.
“We went, actually, last April so it’s been a big secret to keep for the last year,” Likely said from Fredericton this week.
The episode aired on CBC on March 26, but the journey goes back further than April 2013 when Likely, Garrett Nelson and Greg Bailey – all fourth year chemical engineering students – earned the CBC viewer’s choice award at the New Brunswick Innovation Foundation Breakthru competition. That victory earned the trio the opportunity to present their business plan for an environmentally friendly industrial hand cleaner that is non-toxic.
Whisked to Ontario for filming, the trio went before the dragons Kevin O’Leary, Jim Treliving, Arlene Dickinson, Bruce Croxon and David Chilton.
“It was just like you see on television. You walk down the stairs, the cameras are on you and you launch into your pitch,” Likely said.
Under the moniker Prevail Hand Cleaner, the team was looking for $200,000 in exchange for a 15-per cent stake of their company. And as many viewers of Dragons’ Den know, the company evaluation is usually one of the first thing the panel of successful business investors picks apart.
“Right away they wanted to know about sales, and we didn’t have any,” Likely said. “But when they found out we had an existing investor and that was based on their evaluation changed everything.”
The team had placed third in the New Brunswick Innovation Foundation Breakthru competition, landing them their first $50,000 investment in the company. It was a smaller amount than what they were looking for from the dragons, but gave them an edge going into the high-stress meeting. While viewers watched a sixty-second clip of their pitch, the reality is Likely and his teammates underwent an hour of questioning, demonstration and then more questioning. In the end, the dragons loved it.
“We did sort of a Pepsi-challenge, our product versus the leading competitors. Thank God for the store brand not working as well.”
Two of the dragons had their hands spray-painted and were then invited to use the leading competitor and then Prevail to remove the paint.
Prevail, well, prevailed.
“The actual deal, Bruce Croxon] is a technology guy, so he was out. So was David, leaving Kevin, Arlene and Jim.”
“Arlene was offering her usual marketing experience and Kevin had a complicated loan structure… but Jim was quiet through the whole thing. Then he said ‘I can move a lot of this stuff.’ He was who we wanted because of his connection with Mr. Lube [the largest chain of quick oil-change centres in Canada].
Treliving was willing to front the team the $200,000 they were seeking, but he wanted 22 per cent of the company instead of the 15 per cent they pitched.
“It was a bit higher so we asked if we could talk to our investor. We had New Brunswick Innovation CEO Simon Gauvin waiting for our call, but he hadn’t heard from us in a while, so he decided to take a bathroom break right when we called with the cameras rolling. We got a hold of him, though, and he told us to go for it.”
With the deal done, Likely and his team banked $200,000 for start up expenses, inventory and branding.
That was a year ago, and since then the team has moved on since working on negotiations with the University of New Brunswick for licensing and to appoint a CEO while conferring with Treliving’s people.
“We deal with investment analysts in Vancouver, “Likely said. “I think the world of them.”
In an interview with a New Brunswick newspaper, the Daily Gleaner, however, Likely’s teammate Bailey described the business as “dead in the water” after a year of losing momentum waiting on the university.
Online, Likely and his teammates experience in the Dragons Den can be found at http://www.cbc.ca/dragonsden/pitches/prevail-hand-cleaner.