It’s been dubbed the Shark Tank Effect.
After an entrepreneur appears on the hit ABC show to pitch their venture to a virtual firing squad of business moguls, the start-up sees an uptick in Web traffic, new customers and e-mail inquiries thanks to the television exposure.
Rosslyn-based Zoobean has done one better. The company walked away from Friday’s episode with a $250,000 investment from sports and entertainment tycoon Mark Cuban. On Tuesday, the co-founders plan to announce another $400,000 from local investors.
The Center for Innovative Technology GAP Funds and Militello Capital, among others, participated in the recent round. The latest infusion of capital brings the firm’s total venture capital to more than $1 million, including the founders’ own contribution.
“We’ve been really inundated so I don’t think we’ve slept very much since the show aired on Friday,” said co-founder Jordan Lloyd Bookey. “We are reaping the benefits of that.”
Though the company’s co-founders couldn’t discuss the specific outcome of the show with prospective investors — or anyone else, for that matter — they were able to say they walked away with money from Cuban.
The process for appearing on “Shark Tank” began last summer when Zoobean, an online service that recommends books and apps for children, was contacted by a show producer about facing the panel of judges.
Bookey and her husband/co-founder Felix Brandon Lloyd created a spreadsheet of questions that were asked on past episodes and planned strategic responses to each of them. In the five days before filming, they rehearsed the initial pitch dozens of times.
“In real time, I was surprised at how many questions came at once,” Lloyd said. “We’re former teachers so it’s not unusual for us to have a rowdy bunch.”
Ultimately, it was the often-antagonistic Cuban who offered the couple $250,000 in exchange for 25 percent of the business. After some off-camera due diligence with lawyers and bankers, a formal deal was inked.
“He’s intense off camera, too,” Lloyd said.
For example, Cuban and his team require the co-founders submit a weekly progress report via e-mail. Zoobean provides updates on Web traffic, customer conversion rates, revenue and cash on hand.
“You write him an e-mail on Easter Sunday and he writes you three back within a couple hours. That’s the kind of guy he is,” Lloyd added.
But now that the stage lights are off and the cash is in the bank, the co-founders say it’s back to business. Bookey said since the show was taped the firm has added a lead designer and developer to build out its software.
In the future, Zoobean wants to do more than just recommend books, apps and other products for parents based on their children’s needs and interests, Bookey said. It aims become a collaborative platform for a child’s many caretakers, such as teachers or grandparents.
Follow reporter Steven Overly on Twitter: @StevenOverly