Primoza: Ever­y­thing fits but with no investor #DHDL

Many viewers were probably surprised when the three foun­ders of Primoza, who wanted to win a new investor with their “growing calendar” in „Die Höhle der Löwen“, were not successful. Although they received praise from each of the lions, in the end they did not even receive a deal offer. And that was despite the fact that their evalua­tion – often one of the most critical points – was even considered fair.

The theme was also very well received: Calen­dars whose leaves you don’t throw away but plant, and from which then new plants grow. The huge trend of „home gardening“ was thought of in a comple­tely diffe­rent way. This received a lot of reco­gni­tion, because it is well known that the lions love busi­ness models with a strong sustaina­bi­lity aspect.

But one after the other, they dropped out. Ralf Dümmel’s expla­na­tion, in parti­cular, was very number-​heavy: the valua­tion would be fair given what had been achieved so far, but he saw the topic as diffi­cult to market in retail and would there­fore need consider­ably more shares. However, he did not think it made sense to enter into nego­tia­tions for those reasons, or did not want to.

The foun­ders offered 7.5% for € 300,000, a post-​money valua­tion of € 4 million. Against the back­ground of the 2 million already earned and the plan of 4 million turnover in 2021, this did not receive any criti­cism.

But Ralf Dümmel had already asked about the situa­tion in retail. The foun­ders had to admit that the product is not easy to sell, as the USP of the seeds it contains is very diffi­cult to commu­ni­cate to the end customer when you are stan­ding on the shelf among many other calen­dars.

This was probably also what „Mr. Regal“ of the Foun­ders‘ Show meant when he said that it would take some effort to place the product success­fully in retail. The 7.5% offered was too little for him, but with a valua­tion that was already fair, he probably didn’t want to correct it too much down­wards with his offer. But why didn’t he „simply“ offer more money? For example, if he offered 600,000 € for 15%, one would end up with the same valua­tion. But maybe 15% would still have been too little and the necessary invest­ment sum would have been outside his sweet spot at some point. It could also be that he simply did not see a higher invest­ment sum as suitable for the case, as the main aim was to estab­lish the trade as a large distri­bu­tion channel for the growing calendar. The company seemed to be profi­table already and did not need such a large finan­cial injec­tion. So something about the overall constel­la­tion didn’t fit here, a sensible meeting point for both sides was not in sight.

Dr. Georg Kofler dropped out because home gardening is not at all his thing, a reason for refusal that can of course always happen with a person making invest­ment decisions. Of course they have any right to do so, but apart from rese­arch there is not so much a founder can do to prepare for that.

Carsten Masch­meyer, on the other hand, was not satis­fied with the inno­va­tive strength, a factor he probably tried to assess in advance with his repeated enqui­ries about the exper­tise or focus of the foun­ders.

Finally, Judith Williams‘ and Nils Glagau’s reasons were quite similar: although they thought the topic and the foun­ders were great, they assessed their own enthu­siasm for the topic as much weaker than that of the foun­ders. The foun­ders also empha­sised that they wanted someone who was as enthu­si­a­stic about this topic as they were. Espe­cially with such a topic, this is of course very under­stan­dable. But on the other hand, this atti­tude can also make things unne­ces­sa­rily diffi­cult or even scare some inves­tors away: what helps to bound with private inves­tors can be some­what diffi­cult with venture capi­ta­lists or even stra­tegic inves­tors. Because the larger the port­folio, the more an investor natu­rally has to divide his or her own energy. A company that is already rela­tively far along, albeit with rather limited distri­bu­tion chan­nels (as in this case mainly Christmas markets), needs a rela­tively large amount of it to really be able to take the next big step in growth.

So it almost seems as if the likeable foun­ders had a hard time from the begin­ning, just because of the struc­ture of their company, their phase and the necessary steps for the next big growth step. Not needing so much money can even be a hindrance in such a special case.

All the more reason to hope that they will succeed on their own, as the lions discussed after­wards.

Photo (above): TVNOW / Bernd-​Michael Maurer