There’s a new dragon in the Den. James Caan is now the ninth investor to join the show. As filming for the latest series draws to a close, he talks exclusively to Growing Business about pitching, investing and UK business

J ames Caan doesn’t look like a man who gets nervous easily. And judging by his CV, he’s used to pressure. Caan’s business career began in the early 1980s, after he rejected his father’s persistent requests to join the family business. “It was too easy,” he says, so he took a job in recruitment, and after gaining some valuable experience, he decided it was time to go it alone.

The Alexander Mann Group grew from a “shoebox” in London to a global empire worth £120m during its 17-year history. Caan sold it to Advent International in 2002 and is now the chief executive of private equity firm Hamilton Bradshaw.

The company, which he founded in 2004, has ploughed millions into growing businesses, providing Caan with the perfect credentials for joining the BBC’s Dragons’ Den team. Nevertheless, this new dragon admits there are a few butterflies floating about in the Den.

“I was quite amazed how nervous people are. My first time in the Den wasn’t easy. It was hard to come up with the right questions to ask people,” he says. “A lot of people think that we know the people before they climb the stairs, when, in fact, that’s the first time we have ever seen them.”

THE REAL DEAL?

Critics have blasted the show for turning the serious process of investment into a pantomime. The brutal dressing-downs that some entrepreneurs receive at the hands of the unimpressed dragons has led to suggestions that the show is, at least in part, staged. However, Caan is adamant that there is no pressure to play up to the cameras, no script and no second takes. He says that each entrepreneur typically spends about 20 minutes to an hour in the Den and it is very hard to really get under the skin of a business in that time.

Caan usually meets an entrepreneur for two hours on about half a dozen occasions and will bring advisers in too, before a deal is struck.

“When I accepted the offer I thought it was going to be quite easy, but when I arrived in the Den it was much harder than I expected,” he says. “In the real world, if you do a deal really quickly it will take about 10 to 12 hours. To do that same deal in 20 minutes is difficult and to be competing with other people is even tougher.”

The pressure of the show leaves many lost for words and the first episode was no different. A celebrity look-alike business almost fell at the first hurdle after clamming up. The entrepreneur regained his composure and managed to get a part offer from Caan. However, no other dragons were prepared to side with him, so there was no deal.

But why would a seasoned businessman take part in a TV show like Dragons’ Den?

Caan joined the panel following a “call out of the blue” from the BBC. It wasn’t something he had considered doing and he had to think hard about the opportunity.

“I had to take a step back and question whether I was the sort of person who would do this,” he says. “In private equity, you are looking for the next big opportunity and I thought to be in a place where you have all of these chances was a good thing for Hamilton Bradshaw.”

UK PLC

Viewers will see Caan make five investments this series. Backing businesses is clearly something he likes to do, and in his day job he is an active investor. Recently, the UK has been a great place to invest. Like many, Caan is proud of this and the fact that we’re so far ahead of Europe. However, he joins the many other investors who are concerned about the effect that the abolition of taper relief and the flat-rate capital gains tax might have on UK Plc. “I think the concept of taper relief, when the government introduced it at 10%, was a great success,” he says. “I am a big believer in the idea that if something isn’t broken, don’t try to fix it.”

Caan believes Gordon Brown has been a credit to the UK as its chancellor. But now political pressures could be undermining the very legacy that he built.

“The private equity industry in the UK has been an incredible success story,” he says. “This was a great opportunity for Labour to take a stand and win the support of the UK business community.”

Caan has already seen anecdotal evidence of businesses looking to seal a deal before the changes come into force in April. He predicts a flurry of activity before then. However, he has concerns for UK Plc thereafter.

“I am always shocked when people see something that’s working and then target it because it is successful,” he says. “We should value and cherish what we do well. I think that Gordon Brown, who has been the architect of our economic success, should be building on that.”

JAMES CAAN’S QUICK GUIDE TO PITCHING

There are eight Ps to successful pitching, so anyone thinking of entering the Den should learn these:

Person – Caan likes to get to know his investees and wants a relationship with the entrepreneurs. “I am going to spend a lot of time with them,” he says.

Passion – You have to believe in your business if you want others to as well. Investors like to see someone who really cares.

Preparation – Understand your numbers. Don’t come unstuck when you are being grilled in the Den.

Presence – You need presence and credibility. Investors want to see you can handle yourself.

Persistence – It is very unlikely that you will gain backing from your first offer, so be determined.

Product – What are your unique selling points? You must be comparable to something else and be better than it.

Projections – So often the downfall of pitchers. Know your market and how much of it you’re really going to get.

Presentation – Make sure you look (and sound) the part.