In a post on the Spoils Website, Tenacious Games co-founder and chairman Patrick Meehan revealed that the company has been in wind-down mode since early this year, after running out of capital. The company raised $2 million out of a planned $2.4 million needed for launch, but because the second round of financing came in at a lower amount and later than planned, the company entered a death spiral from which it was not able to recover.
Tenacious’ first round of funding, for $1.5 million, was over-subscribed. But when the second fundraising round began in early 2007, difficulties in reaching an agreement with the first round’s lead investor to lead the second round, and the eventual pull-out of that investor, led to a late, undersubscribed second round which crippled the company.
The company’s final release last fall, Seed: Children of the Lingamorph (see “Seed: Children of the Lingamorph”), funded with the reduced second round, was too late to regain momentum for the game.
The company is currently trying to sell its assets to pay its creditors, which include the IRS, employees, players, and trade creditors.