Hatch Baby is a company that has created a new baby changing pad with a built in scale to check the weight of the baby to ensure baby health. The idea is that the weight of a newborn is the best indicator of a child's overall health at that age.
The changing pad synchronizes with an app that communicates with a company server, allowing parents to check on their baby's results even when away (such as at work).
The pad, at the time of airing, was in pre-production but the company planned to ship within "months."
In terms of prior fundraising, Hatch Baby had raised $1,700,000 on a convertible note with a $7,500,000 value.
Syncs with an app IOT so that parents can check even when away on baby results. In pre-production. Shipping in months. Already raised $1.7m on conv-note ($7.5m val). Deal made was a convertible note at same terms.
This deal aired on Episode 7.14.
Making A Deal
In lieu of taking the equity for 2.4%, Chris Sacca asked for a convertible note at the same value as the prior valuation. Essentially this means that Chris was able to buy into the company at the same value as the previous investors. The convertible note offers a 22% discount which is a much better slice of equity than 2.4%. Or, should he get to know the business further, he can back out and just ask for a return on his original investment plus an amount of unspecified interest.
In an update that aired on episode 9.04, the entrepreneurs reported that after feedback from Chris, they designed and built a $99 version of the product by removing the screen and porting several of the other features to the mobile app. Clearly, in order to make this product profitable, it also entailed reducing costs.
In addition, the update stated, they also made it generally easier to clean and use.
While it had been in the prototype phase when the original deal aired, Hatch Baby now has $1,000,000 in sales.