2009 Q&A with early Shark Tank contestants

Many of the Q&As from the first couple years of Silicon City appear to have been pulled offline, which is too bad, because they include some of my favorites. Back then, many of Chicago's tech stalwarts were just getting off the ground, and some familiar features of the larger tech scene were just taking shape. For example, in October I interviewed the founders of a company that had just starred in the season finale of a venture capital-themed TV show that had just debuted a month before, called Shark Tank. Here's the text, just as I turned it in.

When Chicago entrepreneurs Adam McCombs and Brian Duggan agreed to appear on the ABC reality television show Shark Tank, in which they pitched their business to a panel of potential investors, they had to weigh all the usual benefits and dangers of seeking venture capital with another risk/reward calculation: mass exposure versus potential humiliation.

So there are two ways to measure the experience. First, the investment itself: the pair garnered a $600,000 investment in exchange for a 50% stake in their company, JumpForward, a website which aims to streamline the college athletics recruiting process. Also the winning investors, Robert Herjavec and Kevin O’Leary, have backgrounds in technology and seem well-suited as matches for JumpForward. (The deals reached on the show are preliminary—they are agreements to negotiate in good faith.)

Then there’s the marketing boost. In the hours after the show aired last Tuesday, JumpForward’s web traffic exploded—the company reached #1 in the Google search rankings. Soon Mssrs. McCombs and Duggan were fielding offers from prominent ex-athletes who wanted to sign on as JumpForward spokespeople.

Mssrs. McCombs and Duggan tell Crain’s contributor Steve Hendershot how they’re thinking about the experience.

Crain’s: Negotiating a venture capital deal seems plenty stressful without a national television audience. How did you balance the importance of making a good long-term deal with the advantages provided by the exposure?

Brian Duggan: We definitely took into consideration the risks associated with discussing our business on national television. However, we believed that the benefits associated with presenting benefits to a viewership of over 6 million people far outweighed the cost. In any [business-to-consumer] company where word of mouth is important, television provides an unparalleled opportunity to get the word out.

We knew [the appearance on Shark Tank] had to be about both the publicity and the investment. Prior to going on, we didn’t know how these specific investors would respond to our business, but we did know much of America would then be aware of the great things we are doing for athletic community, for high school athletes and their parents. And we were confident that the press would lead us to other investors and strategic partners, whether through Shark Tank or not.

Adam McCombs: We’re happy with how the negotiation was portrayed. There’s always a little risk in terms of what ultimately airs. Now we’re excited to try and leverage this for everything that it can be.

Crain’s: How did you structure the pitch? Were you thinking primarily about the investors or the audience?

BD: We viewed the opportunity as a win-win. If got the investments, great. If didn’t, we still got the word out. That said, our primary goal was to pitch the business on a level that most of America could understand because we wanted to make sure that high school athletes and their parents could recognize the value we bring them. So despite the fact that the pitch was given directly to the sharks, the most important aspect to us was to design a pitch that could be understood by these athletes and parents.

Crain’s: Of course, in the process of getting all this attention, you gave away 50% of the company. How selective were you about making sure you made the deal with the right partner?

BD: We knew going in that we would only accept a deal from an investor who was value-added. Some of the sharks, we believe, are not.

AM: Going into the show, looking at the sharks, they’re all very talented but with Kevin O’Leary and Robert Herjavec we saw an alignment of interest because of their backgrounds in technology. We felt their experience, knowledge and connections could provide value-added services in JumpForward’s growth.