Start-ups

'Shark Tank': How this single mom built a million-dollar online business — her story made Kevin O'Leary cry

Source: ABC

The investors on ABC's "Shark Tank" are known for their sharp bite. But on Sunday's episode, one founder's story was so powerful, it even rattled one of the toughest Sharks, Kevin O'Leary, bringing tears to his eyes.

Entrepreneur Whitney Lundeen from Palo Alto, California walked into the tank seeking $350,000 for a 25 percent stake in her clothing company, Sonnet James. During her pitch, Lundeen explains that as the mom of two young boys, she had a hard time finding fashionable dresses that were comfortable and easy to clean. Tired of yoga pants, she created dresses that look nice, feel good and are washable.

Prompted by O'Leary to explain her $1.4 million valuation, Lundeen hammers out her sales. She explains that she's been in business for five years, selling her dresses direct to consumer online, and in her first year, did $84,000, but last year, raked in $1.2 million in sales. However, Lundeen admits she does need help bumping up her net profit, which ends up being around eight to 10 percent.

Lundeen also told more of her story: She had her first child at 22 and shortly thereafter, became a single mother.

"I was going through a difficult time in my life, and so I had this idea of making a dress that my mom could have worn that could have reminded her to play with me when I was little," Lundeen says. "And I said, 'Alright, this year, I'm going to take the idea, and I'm going to teach myself how to sew, and I'm going to pattern draft.' And every night, I would pretty much sit on the kitchen floor crying, trying to teach myself how to do two things I didn't know how to do."

But after creating her website, a mom blogger picked it up, resulting in Lundeen receiving over 150 orders in 48 hours. She freaked out, calling her brother and telling him she was going to shut down the site and refund everyone's order because she did not know how to meet that kind of demand.

"He said, 'do not shut it down, this is what start-ups dream of," Lundeen says, adding that the next day she got to work.

Greiner then asks Lundeen to expand on something she had said earlier in her pitch — that she had wanted to create a dress that would remind her mother to play with her. Lundeen begins to choke up, explaining she had a difficult childhood that included some abuse and addiction.

"My parents did the best they could with what they had," she says. "I found when I became a mom, I couldn't engage with my kids as much as I wanted to. And I wanted something that could help me be the mother that I had always wanted to be, and something that could remind me every day when I put it on what my priorities were."

She explains that nobody's childhood is perfect and everyone comes from some dysfunction, adding that her mission and life goal is to support mothers do their very best.

At this point, several of the sharks — including O'Leary — are teary eyed.

"How fantastic that you took adversity, and you said, 'That's not going to pull me down, it's only going to rise me up,'" Greiner says.

O'Leary proceeds to wipe a few tears from his eyes, saying that it was a very moving story but now it's time to get back to the numbers. O'Leary has some issues with her valuation of the company, although the other sharks disagree. Guest judge and Spanx founder Sara Blakely offers Lundeen a deal; $350,000 for 25 percent; exactly what she had asked for. The entrepreneur accepts the deal on the spot.

"After 10 years of 'Shark Tank,' you've won the No. 1 presentation for fashion." O'Leary says. "It was such a crazy story...I mean it really, really hit me."

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Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank."