PullyPalz – Interactive Pacifier Toy
DEAL
EPISODE SUMMARY
🕓 Air Date: April 10, 2015
Asking For:
$100,000 for 20%
Investor:
Lori Greiner
Deal:
$100,000 for 28%
PRODUCT SUMMARY
PullyPalz is a pacifier holder that uses a pulley system, providing an interactive solution to prevent pacifiers from falling out of sight and soothing babies.
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Background Story
Julie Thompson, the founder of PullyPalz, hails from Atlanta, Georgia, where she embarked on her entrepreneurial journey to address a common parental challenge. Julie’s background is rooted in design, and her inspiration for creating PullyPalz stems from personal experiences as a mother. Faced with the persistent issue of pacifiers falling out of her babies’ mouths and realizing the limitations of traditional pacifier clips, Julie set out to devise a more effective solution.
The idea behind PullyPalz emerged as Julie observed that babies often struggle to comprehend the concept of objects disappearing from their line of sight. This insight prompted her to innovate a pacifier holder that hangs above the baby, utilizing a pulley system. When one pacifier drops out of view, another becomes accessible, providing a seamless and continuous soothing experience for both babies and parents. Julie’s motivation was not only to solve a practical parenting problem but also to encourage independence in infants during those crucial developmental stages.
Having invested $175,000 from her personal funds, which included retirement and college savings, Julie demonstrated her commitment to bringing PullyPalz to fruition. Despite facing challenges such as expensive safety testing and inventory management, Julie remained the sole proprietor, overseeing all aspects of the business. Her dedication to the product and her personal connection to the challenges it addresses reflect the passion driving PullyPalz’s development and introduction to the market.
The Product
PullyPalz is an innovative pacifier holder designed to address the common challenge of pacifiers constantly falling out of babies’ mouths. Unlike traditional pacifier clips, PullyPalz utilizes a pulley system, offering an interactive solution to ensure that a pacifier is always within reach and in the baby’s line of sight. The product hangs above the baby, providing an engaging and continuous experience, preventing the inconvenience and distress caused when pacifiers disappear from view.
The key benefit of PullyPalz is not only its functionality in keeping pacifiers accessible but also its contribution to the developmental aspects of babies. It promotes right-brain and left-brain coordination as babies interact with the pulley system. Additionally, PullyPalz goes beyond being a pacifier holder, offering entertainment and developmental benefits to the child.
In addition to the pacifier holders, Julie introduced teether attachments and mini versions, providing versatility to the product. The teether attachments allow for variation in use, and the mini versions come with adorable designs, enhancing the overall appeal. This product caters to parents seeking an interactive, developmental, and convenient solution to pacifier-related challenges, adding value to the parenting experience.
How It Went
The company’s position before Shark Tank
PullyPalz exhibited promising performance, with Julie Thompson as the sole proprietor and driving force behind the company. The company’s health was reflected in its sales, having generated $97,000 in the last 12 months primarily through trade shows and online platforms like Amazon. However, PullyPalz faced challenges with distribution and market penetration, particularly in reaching larger retailers like Babies “R” Us and Buy Buy Baby.
As a one-person company, Julie handled all aspects of the business, from design to sales. PullyPalz was sold in approximately 350 specialty stores across the U.S., showcasing its appeal to a niche market. The challenges of being a one-person operation were evident, as Julie mentioned being the designer of the product, managing safety testing, and maintaining an inventory valued at $100,000. The negotiation revealed that Julie had invested $175,000 from personal funds, including retirement and college savings, to fund the company’s operations.
The company’s structure appeared to be centralized around Julie’s efforts, and the negotiation highlighted the need for external support and capital to scale the business. While PullyPalz had garnered positive feedback from specialty stores, securing a deal with Lori Greiner provided not only the required capital ($100,000) but also access to Lori’s connections, including major retailers like Buy Buy Baby and Toys “R” Us. The deal represented an opportunity for PullyPalz to expand its reach and further establish itself in the competitive baby product market.
The Negotiations:
During the negotiations on Shark Tank, Julie Thompson, the founder of PullyPalz, faced a mix of skepticism and interest from the Sharks. The discussion kicked off with Julie seeking $100,000 for a 20% equity stake in her innovative pacifier holder company. Several Sharks expressed concerns about the product’s price point and the challenges associated with distribution. As the negotiation unfolded, Mark Cuban and Daymond John bowed out early, expressing reservations about the market dynamics and perceived limited appeal of the product.
Kevin O’Leary and Robert Herjavec raised questions about the high cost of the product and its potential impact on market penetration. However, Lori Greiner saw potential in PullyPalz and made a surprising offer. She proposed investing $100,000 for a slightly higher equity share of 30%, leveraging her extensive retail connections, including Buy Buy Baby and Toys “R” Us. This offer countered Julie’s initial ask but demonstrated Lori’s belief in the product’s viability and her ability to facilitate broader market access.
Julie, recognizing the value of Lori’s offer and connections, engaged in further negotiation, proposing a compromise at 25%. Lori countered at 28%, and after a brief pause, Julie accepted the deal. The negotiation showcased the delicate balance between securing necessary capital, accessing retail giants, and finding an agreeable equity split. Ultimately, Julie’s decision to partner with Lori Greiner marked a significant milestone for PullyPalz, providing the company with the funding and industry connections needed to navigate the competitive baby product market and accelerate its growth.
