What’s It Like Finding Startup Funding? TrainAway CEO Explains
Giving an insight into life leading an early traction startup, Alexander Schrøder, CEO of TrainAway, discusses the process behind finding startup funding.
‘Looking for investors usually means waking up early,’ explains Alexander Schrøder, CEO of gym-finder app TrainAway. ‘Coming from Denmark, we’ve had to look overseas for most of our funding and that means getting up and boarding a plane.’ Recently returned from a trip meeting potential investors in Estonia, Schrøder discusses life as the boss of a startup less than two years into its journey.
Balancing Stakeholder Needs
‘We were fortunate to have an investor from the start who shared our vision, but we’ve reached the point where we need more backers to support our long term ambitions.’ Schrøder and co-founder Kenn Gudbergsen founded TrainAway in 2016 after encountering difficulties finding a place to train when travelling.
Their first task was to create an online gym database that would give travelers a range of gym options anywhere in the world. Now largely complete, the second stage is to create a network of fitness centers selling day passes in every major city around the world. This means that the TrainAway management team has three main stakeholder groups: investors, gyms and users.
‘Balancing our time between the three groups isn’t easy, we just have to make sure we don’t lose sight of one group whilst concentrating on another,’ says Schrøder, ‘and this means we have clearly defined roles in our management team, as I put more of my time towards working with our existing investors and others looking to invest. I’m lucky enough to have a great team I can trust to manage other crucial parts of the business.’
“Much less glamorous than it sounds”
‘What you start to realize is that Europe is a small place, and people know each other, so building a network is the most important thing. When you’re starting out, you can’t afford to turn down any opportunity.’ TrainAway started out with strong angel investor backing but has since looked to other options, from a range of investment vehicles to existing fitness industry players. But none of these came knocking at Schrøder’s door.
‘It means a lot of cold calls and knocking on doors. Flying off for meetings in different countries is much less glamorous than it sounds. I can’t tell you the number of rejections we’ve had, or the times we’ve been told ‘maybe in six months or a year.’’
Is the constant effort worth it? Schrøder is confident that it is. ‘Occasionally you meet someone who brings much more than funding to the table. We’ve been extremely lucky to have investors on board who give us freedom whilst also providing some great advice.’
A Values-Based Approach
Schrøder is certainly aware of investor-management conflict horror stories from other young companies, a situation he is keen to avoid. ‘If someone ends up investing who we fall out with six months down the line, then I’ve done my job wrong,’ he says, pointing out that shared values are at the heart of the process. ‘We have to ensure that we don’t just have the same goals, but that our approaches align too. And that we clarify our relationship from the outset.’
It’s a task that he takes extremely seriously, for various reasons. ‘The obvious point is that without investment, we’ll simply run out of money. That would be devastating, as we’re all genuinely committed to solving this problem, but there’s also the human side. I have personally convinced people to quit other jobs or turn down other, more secure opportunities to come and work for TrainAway. I feel a natural sense of responsibility to make sure they can pay their rent in three months.’
“If an investor meeting doesn’t go well, the whole team knows”
From starting with just the two co-founders in an office in Schrøder’s parents’ garage, TrainAway now has over 10 staff, an office lease and various contractual commitments. Yet it remains a tight-knit group and news doesn’t stay hidden for long. ‘If an investor meeting doesn’t go well, the whole team knows within a couple of hours. I can’t say that it doesn’t affect morale. Everyone knows the reality of the situation – that if we don’t get further investment, we’ll all be out of a job.’
So what’s the best way of keeping focused on the task at hand? Perhaps the answer is expected, given TrainAway’s sphere of operations. ‘I find fitness is great as a way to escape the pressure of work,’ is Schrøder’s response. ‘I play competitive basketball regularly and try to get to the gym whenever I have time, especially when traveling. It’s great for de-stressing and actually gives me more energy when I’m at work, which is important as we sometimes have some very long days.’
And what’s next for TrainAway? ‘In October we announced a partnership with IHRSA, the world’s largest fitness association. We’ll be digitizing their travel passport program, which guides traveling gym members towards a good quality gym. It has instantly opened up 50 countries and nearly 10,000 new gyms for us so puts us in a unique position in the industry. It’s the biggest endorsement of the model we’ve had and is one of those moments that makes all the hard work worthwhile.’
So what are the chances of things slowing down soon? ‘I think that’s highly unlikely,’ he replies with a smile, ‘But I know it’ll be worth it in the end.’