Following Funco's initial public offering in 1992, the company experienced rapid growth spurred by the increasing momentum of the video game industry and the retailer's unique business model, which fended off any direct competitors.

FuncoLand stores, which were often located in strip malls, featured sampling areas that allowed consumers to test a video game before its purchase, a practice that Pomije compared to the automobile industry.

The fifth generation of video game consoles brought about the company's recovery, and the release of the Dreamcast granted a single-day sales record.

[5][6] While the venture was initially successful, extravagant personal spending and lack of financial, operational and inventory control resulted in a Chapter 7 liquidation around March 1988.

After a couple of encounters with particularly rude dealers, he was inspired to establish another mail-order company named Funco, and began advertising his offer to buy and sell used video games in industry magazines.

[6] During the Christmas 1989 season, he needed to install four telephone lines in his house to accommodate his growing business,[6] and recruited his wife, father and uncle as staff members.

[6][7] The following month, he began running an advertisement campaign in a daily Minneapolis newspaper, which attracted customers coming in from as far as Wisconsin and the Dakotas.

[9] In late 1990, after sales reached $50,000, Funco opened two FuncoLand stores in Eden Prairie and Roseville to prepare for the coming Christmas season.

[9] While these key hires – which include executive vice president Stanley Bodine, MIS director Michael Hinnenkamp and financial controller Robert Hiben – cost Funco a total of $519,779 in 1992, Pomije was willing to absorb the loss to ensure the presence of adequate information systems and financial controls that were absent in his previous business failure.

[6][11] By October 22, 1992, there were 29 FuncoLand locations between the Minneapolis, Chicago and Dallas areas, 190 employees within the company and a projection of $22 million in sales for the 1993 fiscal year.

Electronic Boutique's original definitive agreement with Funco included a breakup fee of $3.5 million, the cost of which was covered by Barnes & Noble.

[35][36] Pomije grossed an estimated $35 million for his stock and options, and left the company to focus on developing the secondhand golf equipment retailer Second Swing, in which he was a majority shareholder.

[8] During 1990, the names, prices and supplies of games were charted by hand on a whiteboard in the New Hope warehouse; Pomije converted this method to a computerized format in 1991.

[8] The company's total inventory included around 500 million video game cartridges, some of which were rare collector's items no longer sold by their manufacturers.

[8][43] Pomije remarked that competitors such as Toys "R" Us would sometimes refer customers to FuncoLand if they requested older games no longer carried by the larger chains.

[5] Pomije compared the chain's policy of trading used games and testing new ones to the practices of the automobile industry, saying "You wouldn't buy a new car without driving it around the block".

[41] Funco's marketing focused primarily on television advertising, with support from newspaper ads and inserts, in-store promotions and direct mail.

In addition to its retail outlets, Funco leased a 50,000 square foot distribution center and office facility in Eden Prairie, where its corporate headquarters was located.

[46] As the leading purveyor of used video games by 1993, FuncoLand's initial competition was limited primarily to independent shops and smaller regional chains;[47] on the advent of 1993, the company was reported to have no competitors within the Minneapolis and Chicago areas, and one competing firm within Dallas.

[48] Funco's head start in establishing its concept and the difficulty in emulating it allowed the company to enter major metropolitan markets before the arrival of any serious competition.

[54] By June 1994, the retailer expanded into the East Coast with locations in the New York, Delaware Valley and Washington–Baltimore areas, making for a total of 117 stores.

[57] However, an industry-wide slump and a nosedive in the company's stock price resulted in the cancellation of these planned openings, leaving the total number of stores at the end of 1995 at 182.

[62] Other markets opened in fiscal 1999 include Los Angeles, Hampton Roads, Richmond, Austin, San Antonio, Memphis, and Pittsburgh.

[8] In September 1990, a month after Pomije set up a retail outlet next to the company's warehouse, a successful advertising campaign in a daily Minneapolis newspaper resulted in $25,000 in sales for Funco within two days.

The chain declared an intent to focus on increasing sales in existing markets and improving expense controls and margins during the industry's recovery.

On January 6, 1997, Cannon filed an amended complaint repeating his previous allegations while asserting various claims under the Securities Exchange Act of 1934, seeking an unspecified amount of damages plus costs and attorney's fees.

[56][77] After Funco and Pomije filed a motion to dismiss the complaint in its entirety, the involved parties negotiated and reached an agreement in principle to settle the suit out of court.