Innovation

Lessons from the Dragons' Den: When both sides win

Written by Rick Spence


Tune in, read on, lift off

Capital connections

What Dragons want

Here be dragons: 
Jim Treliving
|  
Kevin O’Leary

Laurence Lewin
Jennifer Wood |  
Robert Herjavec

Meet the multimillionaire entrepreneurs who rule the Den — and know a good business when they see one

Jennifer Wood
President and CEO, Cattle & Co. Investments, Edmonton

Best advice: “You need to know your stuff [when pitching]. You need to be short and succinct”

As the daughter of a cattle broker who bought livestock on behalf of feedlot owners too busy to attend industry auctions, Jennifer Wood grew up in the cattle business — and the world of on-the-spot deal-making. After brief stints running restaurants in Calgary and flying commercial float planes, she joined the family business and helped expand it into a major integrated producer, buying up feedlots and auction houses. “Everyone says I’m a good negotiator,” she says modestly.

But Wood’s strategy was anything but modest. She saw two trends shaking up the Prairie beef industry: increasing consumer concern for healthier and safer beef, particularly following recent outbreaks in Alberta of mad cow disease; and growing financial pressures on the traditional family farm. But her goal of building a powerful new company to raise cattle and provide financial, information and management services to other producers proved too ambitious for her father, Ted. The two divided up their assets and Wood — with her husband Jake Burlet, a veterinarian and MBA grad — set out on her own. Today, her growing business, Cattle & Co. Investments Inc., represents just about every part of the beef production chain, offering auction and buying services, cattle feeding, brokering and financing, forward contracts, risk management, and professional animal-health services. It also manages 20,000 head of cattle, many of which are contracted out to independent feedlots. The strategy saves Cattle & Co. from tying up its assets in land, while providing a reliable income to hard-pressed feedlot owners.

As if that weren’t enough, Wood and Burlet run another company, Viewtrak Technologies Inc., that produces innovative systems for tracking and distributing detailed information on the care and breeding of individual cattle. The goal is to restore consumers’ faith in beef (and meet growing industry regulation) by recording the complete genetic and medical history of every animal on the market. Cattle buyers feel more secure about what they’re purchasing when they know where each animal has come from, what it has been fed and how it has been treated; sellers command higher prices when they can prove their livestock have been raised with the best possible food and health care.

Viewtrak now has customers across Canada and in the U.S., Mexico, New Zealand and China, and is moving into other commodities such as pigs and mushrooms. “This company is just going to grow and grow and grow,” say Wood. “Since it’s Internet-based €¦ there are no barriers.”

Wood, who figures she has negotiated about a dozen major investments that will help build her businesses, says the essence of deal-making is simple. Whether you’re buying or selling, “you have to listen and understand what both sides need to make the deal work. Look at it from the other person’s point of view. It’s not a good deal unless both sides win.”

Wood brought that philosophy to Dragons’ Den, judging the pitchers as much on their integrity and ability to communicate as on their business propositions. She pulled no punches when she felt she wasn’t getting the full story. In passing on one contestant’s opportunity, Wood explained, “I invest in good people. And for that reason, I’m out.”

After listening to more than 100 pitches in eight days, Wood despaired at the entrepreneurs who hadn’t thought through their business plans and couldn’t offer compelling reasons for the Dragons to invest. Although the pitchers came seeking equity investments, their businesses weren’t likely to produce the growth prospects and double- or triple-digits returns that providers of risk capital expect. “A lot of people needed to learn the difference between a small business and an investment opportunity,” she says. “I think that may be the key learning that comes out of the show.”

Originally appeared on PROFITguide.com