From Zero Offers To Record Revenue
Founders, and especially investors, like to throw out the term “burn the boats”. A reference to the fact that there’s no turning back. That the only way is forward. This is a story of how an operator accidentally burned his boats, and how no-turning-back worked in real life.
I’ve known Michael Martinez, CEO and co-founder of FunCraft, for over a decade, and I really like him, as you can hear from our podcast. His first startup (Juicebox Games) had its office a few blocks from where we lived in San Francisco. We almost worked together twice, at two different companies. We shared the same VCs as founders. And I also told him not to start FunCraft. More about that later…
Listen to the full conversation on Deconstructor of Fun
In spring 2025, Michael tried to sell FunCraft. The people he trusted told him to wait. He searched for a second opionion that would encourage him to run the process anyway and found it. Nearly forty buyers later, he had zero offers. It was a devastating outcome for a founder. After all, the company is an extension of you, so the rejection is always personal.
Today FunCraft is on a $50 million run rate, growing 50% year over year with just fifteen people. It made more profit in the first five months of this year than in all of last year. The company today is more than twice the size it was when Michael called the bankers. And Michael is not even thinking about an exit anymore, enjoying the scaling phase with every consecutive all-time-high revenue month.
Continue reading and you’ll learn when and how to run a sale process. The price of rejection and how to overcome it. The role of sales price. And why trusting advice of those, whose goals are aligned with yours, is smart.
Rejection has its price
Before the sales process, things were looking good for FunCraft. A VC-backed studio, six years in, growing. The market was hot, so an exit was the logical endgame. The setup for kicking off the sale process of FunCraft was classic. Real inbound from a serious buyer. Michael wanted to test the market. The best sell-side banker in the business, Aream’s Affan Butt, told him to be patient. So did Play Ventures. The first investors into FunCraft who saw the potential and were supportive of Michael to keep growing and compounding rather seeking an exit.
Michael couldn’t stay patient. He went on a hunt for the answer he wanted to hear. And found another banker who said the deal was doable. Spoiler alert: it wasn’t.
The sale process made every textbook mistake:
The buyer list was too broad. When you’re selling to everyone, you’re not selling to anyone.
Management presentations dragged into June and July, straight into the summer dead zone where any emerging FOMO runs away with the bankers and executives on to the Cyclades and the French Riviera.
On top of that, the price expectation that reached buyers was, in Michael’s words, “untethered from reality”.
Nobody countered, because there was nothing to counter. And Michael owns the mistake as he outsourced the whole process and didn’t check the details. The market wasn’t the problem. Plenty of parties were interested. The terms killed the deal before a single conversation could start.
“There were many interested parties. I know these people. They had expressed real interest. So, to not even begin the negotiations, something didn’t make sense to me.”
There are two costs operators fail to take into account when a sale process goes wrong:
Dozens of companies now hold your deck and a memory of a founder who priced themselves out of the room. This means that you’re ‘on ice’ for a couple of years and have to start from a deficit next time around.
The emotional toll on a founder is significant, and depression is not out of the realm of possibility when a sale process fails. You see, during the sale process, you fantasize about your life post-exit for months. And when that future collapses, it’s not a trivial rejection to get over.
Burning the boats, accidentally, in real life
Michael and his co-founder and CTO Jason McGurk, who he built his previous startup with, spent one weekend feeling sorry for themselves. Then they took the sale off of their minds.
That decision matters more than the rejection. A founder running a sale is a founder looking at the exit. Every roadmap call, every hire, every KPI gets filtered through how it reads to a buyer. Worse, a live sales process functions as a savior for any issues. Whatever is broken in the business, the deal will solve it. Whatever is hard, someone else will inherit it. Focus is on getting the deal done.
Killing the process killed the savior. No buyer was coming. No banker was going to hand them a number that made the last six years worth it. The only thing left to work on was the business itself, and the only way out was to make it a bit bigger and a bit more profitable than it was the month before. Every consecutive month.
When you kill the exit, only one question remains: how do we turn this startup into a sustainable company?
And believe it or not, a sustainable business doesn’t translate directly to higher valuations. Unsustainably growing businesses held together by duct tape and prayers get the largest funding rounds and fastest exits, if they survive the months of due diligence without evaporating mid-flight.
Here’s my take. The rejection did not create FunCraft’s growth. The company grew by 40% in 2025 to $36 million, and most of the machine was already built. What the failed process did was remove the distraction and change the scoreboard from what we’re worth to what we earn. So FunCraft cut its more speculative campaigns and got rigorous. The growth stayed, and the profit followed.
The hit factory
FunCraft doesn’t operate like a typical successful mobile studio in 2026. Fifteen people. Four engineers. Two UI artists. Sixteen games launched in each of the last two years. One engineer owns a game and ships it in roughly six weeks. Without a product manager. Without a designer.
What enables this is their AI-powered proprietary ExampleCraft 2 engine that Jason built. Identity, login, analytics, live ops tooling, and every feature that has earned its place in a live game, from the achievement system onward, lives in the engine. A new game is new gameplay. Everything else comes as a part of the engine. This is possible because the engine is focused. FunCraft makes turn-based games. It’s their core competence. Just like Dream’s focuses on Match-3, Moon Active on social casino and Rovio’s double downs on their birds.
“We have to judge ourselves very honestly, with ROAS metrics from day one. None of this our-metrics-look-good, we-have-okay-retention, we’re-gonna-fix-the-game-later. Everything matters from the first install we buy.”
The kill criteria with FunCraft are brutal. ROAS from the first purchased install, no excuses. The portfolio shows why. Games the team loved flopped. Farkle, a classic dice game they debated even launching, is now the biggest title and has the best retention in the portfolio. Bingo Dice, their number two, was pitched by a UI designer, jumped the queue, and was live in six weeks.
FunCraft treats a launch as a cheap test rather than an expensive investment. The value is kept in the team, the ultra lean development process, and the proprietary engine rather than in any single game launch.
The unit economics and the treadmill
On the current run rate, FunCraft generates above $3 million of revenue per head, profitably. Eighty percent of revenue comes from ads, with a global ad ARPDAU of $0.60 and climbing, driven by a core audience of women over 35 who overlap heavily with puzzle and casual.
Now the bear case, and it’s a real one. This is an acquisition and ad monetization engine, not a franchise business. Meaning retention is solid for a hybrid-casual game but not quite at forever-franchise levels. IAP is 20% of total revenue. Growth depends on winning UA week after week. AppLovin is one of FunCraft’s largest channels and sees both sides of the business. Rewarded UA continues to work marvelously. Meta is yet to become a factor. A skeptic could fairly call this a well-functioning treadmill. Not an asset you can buy and place into a different organization.
Michael’s answer is the numbers, and I mostly agree. A treadmill that has run for six years, accelerated in a flat market, and doubled profit is not a house of cards. It’s a business Michael calls good, not yet a great one (they look up to Dream and Supercell as great businesses, a deservedly high bar). That’s the right diagnosis. And judging by their consistent trajectory, great is in the horizon and they are consistently making their way towards it.
Who FunCraft needs
FunCraft doesn’t do management. Trust is given. Then verified before more responsibility is given. The team has been remote since six months before the pandemic, spread across operating globally from Buenos Aires, Serbia, Israel, and the US. Everyone gets equity. Performance is fully transparent. And there are no training wheels.
“We want to hire people who have a little bit of a chip on their shoulder.”
Michael is looking for people who are senior, self-driven, and allergic to waiting for instructions. A growth lead who owns Google, AppLovin, Unity, and Meta and builds the AI-driven creative factory behind them. A designer who lives inside the engine and pushes FunCraft into game styles it hasn’t touched. A product manager who turns short tails into long ones. Those are the gaps Michael named himself. Filling them is how a good business becomes a great one.
One moment says everything about the culture. At the June leads meeting, Michael asked whether they were doing enough. Jason listed everything shipped in May, then everything planned for June. Michael stopped asking.
>> Explore careers at FunCraft <<
What this should teach the rest of us
Michael told me he was starting a company when we were on a run at Lands End. It was a beautiful morning in San Francisco. He was running a studio at EA. We both knew how the previous startup journey ended. So I told him to chill. Continue at his cushy corporate job, take the fat salary, cash in the RSUs. A friend would never push another to sign up for years of grinding with miserable chances of success.
That advice was wrong the way most advice to founders is wrong. It weighs the odds instead of the person. The odds are real, and they say that a vast majority of these companies die. They say nothing about whether this one will, or about whether the founder can take a decade of self doubt, missed opportunities, extreme ownership and still keep shipping.
The hard part is the stretch between believing in the thing and having proof, also known as product-market fit. That’s where most founders silently quit by pivoting without committing till the funds run out. Done usually with a perfectly reasonable explanation.
The reward for surviving that stretch is not the exit. It’s the moment the business starts compounding without you holding it up. When you send an investor update from your summer holiday with your family stating your latest game is scaling, and you’ve hit your all-time-high revenue (again), and this was the first time in a week you got to open up your computer. True story.
Michael has reached that point. He got there after being told no by everyone, including me. That’s usually how a successful startup story goes.
Four things for all operators to learn from FunCraft:
Investors love it when you set absurd sales growth targets. It shows ambition to them. Buyers hate absurd numbers. It shows hubris to them. Michael never got to negotiate the price because the number that reached buyers made the conversation pointless.
Rejection sticks and compounds. When your sales process or an investment round fails with zero offers, you’ll need to overcome those rejections first before starting a process again. Consider it reverse FOMO. Both buyers and investors talk to each other. One says no, and the likelihood of their peers saying no just multiplies. So run a sale process or an investment round when there are already at least soft commitments. The price of rejection is way too high for you to just test the market.
If a banker and a venture capital, who both make money off your sale, are telling you to wait, you should wait. Affan Butt’s Aream & Co. has run over a hundred successful transactions in the gaming industry. They had every incentive to take the mandate and yet told Michael to be patient anyway. Play Ventures, FunCraft’s first backers, offered to more funding to hold back the sale. There’s was no need for a second opinion.
The fastest way to become sellable is to stop trying to sell. The discipline FunCraft found after the rejection in the form of cutting weak campaigns, chasing profit instead of valuation, is exactly the discipline that would have made the process work in the first place.
