A digital textbook rental company created by three young Illinois State alums while they were students appeared on ABC’s Shark Tank on Friday. So how’d they do?
(And before we go any further: SPOILER ALERT if you haven’t already watched yet.)
Packback Books co-founders Kasey Gandham ’13 and Mike Shannon ’12 walked away from Shark Tank with a new investor: Mark Cuban. After some haggling, the famous billionaire and NBA owner agreed to invest $250,000 in Packback for a 20 percent stake in the company.
Cuban was one of five self-made tycoons who Gandham and Shannon faced during their segment at the end of Friday’s taped Shark Tank. The other four “sharks” declined to invest in Packback, but Cuban was attracted to its pay-per-use model for book rentals.
Cuban wanted even more than the 10 percent equity that Gandham and Shannon initially offered.
“I like the concept,” Cuban said. “But 10 percent isn’t enough. I want you guys to come back to me and tell me what’s the most equity I can get. How and how much?”
After huddling up and making a counteroffer, Gandham and Shannon accepted Cuban’s $250,000 offer for 20 percent. The two looked ecstatic walking off the set as the episode ended.
Cuban’s investment is the latest high-profile win for Packback, which Gandham and Shannon founded with ISU classmate Nick Currier ’13, M.P.A. ’13, while they were on campus. The College of Business alumni won an Illinois State entrepreneurship contest in 2011 before attracting the attention of big-time investors and publishers, even before the Shark Tank appearance.
Frustrated by the high price of college textbooks that only saw limited use, the Illinois State trio created Packback as a new method of renting textbooks by the day, instead of by the semester, for $5 or less. Now based in Chicago, they’ve been working to grow Packback’s library of on-demand e-textbook rentals and add more free tools.
On Friday, Gandham and Shannon told the “sharks” that they were “already working with major U.S. textbook publishers to bring the Packback service to students nationwide.” The young alumni were peppered with tough questions about licensing agreements and revenue splits, but both confidently held their own while under the national spotlight.
The Packback team watched the episode at a viewing party at Chicago’s startup hub 1871, followed by a live chat after the episode. (Check out video from the party on the Chicago Tribune’s Blue Sky publication.) Gandham said they plan to return to Illinois State’s campus soon to speak with students about their experiences with Packback.
Ryan Denham can be reached at rmdenha@IllinoisState.edu.