“You have nothing yet”: When Shark Tank investor Kevin O’Leary expressed interest in Au Baby

On Shark Tank season 15 episode 13, Alexandra Ulmer was seeking $80k for a 25% equity in her business Au Baby. During her pitch, Ulmer shared that she had found a solution for new moms by making sustainable baby blankets that are stain and smell-proof. Each blanket cost $74 to make and was priced at $160. Au Baby's total sales were $62,000, and the yearly sales were $38,000.

Kevin O'Leary was the only shark to make an offer, he said:

"The only way I'm going to get my money back is if I work like a dog. We have to do a ton of work. You have nothing yet. You have no value yet."

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Au Baby founder agreed to Shark Tank investor Kevin O'Leary's offer

Kevin O'Leary explained that the business had some setbacks that needed to be addressed. He was interested in placing an offer but was also unsure about how the product was to be marketed with the limited target market. He said:

"I would buy this if I had a child that was, you know, three months old. If I could sit in front of you for five minutes, it's so credible of course, I want to pay a massive premium for it, but the magic in the secret sauce is when you get the mother at that exact time post birth, to trigger the purchase and how do you reach her."

Shark Tank investor Kevin O'Leary questioned the customer acquisition as well as the price of the product. He asked:

"So customer acquisition is everything and I'm choking on the price and I'm freaking its so expensive. I get it but what's the plan to sell it?"

The Au Baby founder shared that her company had collaborated with the best pediatricians in the country. Upon hearing this, Mark Cuban pointed out that this marketing strategy was not being translated into numbers. The Shark Tank investor explained that the problem was not with the product itself or whether it was sellable but about where the consumer's purchasing decision was being made.

He backed out from placing an offer as the business needed a better marketing strategy to target potential buyers. Later in the episode, Robert Herjavec also backed out by mentioning the higher price point. He elaborated his point of view:

"In general, the higher the price point, the consumer doesn't always connect with that value proposition. There's a cost for that; anytime you have to teach a consumer, the price goes up, and you haven't proven the cost of acquisition. I just don't see it right now.'

Meanwhile, guest shark Emma Grede and Shark Tank investor Lori Greiner didn't place an offer either; for them, the business was in an early stage and hence wasn't investable right now.

This meant the only remaining shark was Mr. Wonderful, who was ready to partner up with the Au baby founder. O'Leary offered $80,000 for 50% equity however, Alexandra Ulmer was quick to counter back with $80,000 for 30% equity. Kevin countered with 40%, and then she countered again for 35% equity.

Kevin agreed to the 35% equity, and a deal was secured. New episodes of Shark Tank are available to stream on ABC. Fans can follow Kevin O'Leary on his official Instagram.