Dragons' Den CIC confusion ends in walk-out

A socially enterprising sculptor was hit with the wrath of the BBC Dragons this week as he appealed for investment.

Cornwall-based artist Richard Austin asked the Dragons’ Den panel for £50,000 for ten per cent equity to fund his Sculpta-face kits in Monday’s programme, which was filmed in May. The kits help people create a face sculpture and feature some basic equipment and a DVD.

His plan was to use profits made from a private company limited by shares making and selling the kits to fund his Community Interest Company, which holds sculpture workshops for community groups and disadvantaged people.

His business plan had been devised after seeking business advice, he said.

However, the Dragons became heated when they heard his idea, saying there was a conflict of interest. Duncan Bannatyne became so angry he stormed out of the room and Peter Jones said the private company would ‘exploit’ the social enterprise. Only Deborah Meaden said Austin had made the right move, but declined to invest. Austin left the den with nothing.

Speaking to Social Enterprise after the programme aired, Austin said he was disappointed by how it was edited. One hour and a quarter was cut into just three minutes, only showing the opening pitch and the wrath that followed. There was no mention of the community workshops, case studies or the success of the CIC, which has a turnover of £13,000 since it was set up in 2008 and gets no grant funding. Austin also ploughs around ten per cent of his profit made as a commercial sculptor into the CIC.

Austin, pictured left with his Chelsea pensioner creation, has been a sculptor since 1992 and holding workshops since 1994. He said: ‘We have worked everywhere from primary schools to Dartmoor prison. In all that time we’ve been developing these kits and, since 2005, they’ve been part of our outreach work. We wanted to separate this from my commercial work, so set up a CIC.

‘Funding workshop leaders was difficult, so I was advised to retail the kit. Because the CIC is not for profit, I was advised to set up another company, the profits of which would filter into the CIC. I’m just a sculptor. If someone gives me business advice, I take it.

‘The pitch was going well until Duncan Bannatyne asked what a CIC was, then he went off on a tangent. But my real gripe is with the editors for not giving the time to show its social impact.’

Austin said he didn’t know he could raise equity investment through a CIC until he was contacted by the CIC Association and Social Enterprise this week.

CIC Association founder John Mulkerrin said the show raised the issues of lack of knowledge of the legislation by business advisors, and the confusion terms like 'not for profit' can cause.

‘He didn’t even know he could run the kits through a CIC, he might reasonably expect to be made aware of it as an option at the very least. It all comes back to the need for practical infrastructure and good information. It would have been cracking to see what they thought of the dividend cap!’ he said.

The programme can be seen here on BBC iPlayer until 20 September. Austin’s pitch is around 27 minutes in.