In recent years, calling himself a startup founder was definitely seen as a stretch. For those who hold or aspire to that role, they may be placed on a pedestal or seen as a visionary, aided by a venture capital market that has experienced an extended bull run in the background.
However, behind the glamor and front-page interviews and features, the life of a founder can often lead to serious issues like depression, burnout, panic attacks and imposter syndrome that can affect a person’s mental health – and if left untreated, their startup and its productivity – employees, operators and Executives – may suffer.
In the year In 2019, a report found that 72% of surveyed entrepreneurs self-reported mental health issues, according to Forbes. It is not clear what these numbers are now; However, they are likely to increase significantly in light of the pandemic, the instability caused by the collapse of SVB and FTX, and the wider impact of the economic downturn, which has led to a major financial crisis and massive layoffs.
This TechCrunch article suggests that risk-taking is driving the mental health epidemic among entrepreneurs. It also explains ways to solve these problems: prevention and awareness, methods that seem to be growing on the international and western front, their markets are filled with millions of therapists and apps like Calm. In emerging markets like Africa, not many. In addition to having few outlets to address mental health issues, founders on the continent are facing a new type of pressure coming off the back of the record capital year (2021), reinforced by large US and international funds: chasing projections. And trying to agree with inflated prices.
There are other minor effects. For example, the While SVB’s sudden collapse only affected a handful of startups, it sent many African founders into a panic mode as they scrambled to evaluate banking options. With ongoing challenges, especially in the current bear market, these events highlight the need for founders to prioritize their mental health and help investors and boards seek support when needed.
To explore the issue further, TechCrunch spoke with Ameyah Upadhyay and Lisa Mickelson of Flourish Ventures, an evergreen global VC firm. Claims to take a “founder safety” approach to investing; To discuss why investors should invest in the mental well-being of African founders. It is Upadhyay Business partner in the company. At the same time, Mikkelsen is the head of Global Human Capital, the arm that helps portfolio companies with business and human resources strategies, including security discussions.
TechCrunch: Why is the conversation around the mental health of African founders so important now? Has the SVB scam highlighted its importance or is it a theme that has been waiting to be touched on for years?
Lisa MickelsonI think SVB has taken the issue to another level. But I think we’re really impressed with this topic as we start to see the challenges with founders around the world, how they manage their security, how they find employees in crisis, how they move, and they’re trying to reimagine their organizations from physical to virtual.
On top of the pandemic, we have other kinds of global crises: monetary and macro challenges with markets, now SVB, all piling up on top of each other, creating more stress than founders have. But I think it’s worth noting that this topic, despite its good timing, will not go away. Anecdotal evidence shows that founders tend to settle when good things happen, even when they get more funding and have multiple rounds. Such events cause various feelings of insecurity and anxiety. So whatever happens now, this is something that will be with us for a long time. But now it is undoubtedly added.
How should investors help founders manage the stress that comes with fundraising?
Ameya Upadhyay: I’d say raising capital, managing boards and managing employees are probably the three most stressful things in a CEO’s life. How we approach fundraising is to remove uncertainty for the founders. What often happens is investors aren’t sure if they’re investing in a company and they hang out with the founder to find out where everyone is or if they don’t have the bandwidth to make that deal. And one principle that we follow very closely is to be upfront and transparent with the founder, whether we do due diligence or exit. Therefore, clear upfront communication can honestly remove founders’ uncertainty and should be the most important factor when approaching a new investment.
MickelsonAdditionally, during the fundraising process, founders should look for red flags for investors. And to Ameya’s point, “Does the investor see you as a person?” “Do they care about you?” “Do they need you as a person?” When times are good, money is thrown at people left and right. Africa appears to be the next frontier that everyone wants to enter, but do you really understand the connection? And honestly, in the decades I’ve worked in Africa, I feel like it’s a relationship-oriented place where people prioritize relationships, which is not the case in other places outside of Africa. So when foreign money comes in, you should know that and pay attention to it. Ultimately, I think there is a danger that African founders may take that peace for granted.
Therefore, in a sense, foreign capital can act as a stressor for African founders.
Upadhyay: Yes, I think dealing with foreign investors adds to the stress of African founders. Whenever you pitch to a foreign investor and try to justify why they should invest in Africa, there is a wide cultural, contextual gap that they run into. And frankly, for these investors, the idea of a successful CEO is built around what it looks like to be a CEO in Silicon Valley. So African founders try to speak that language and be that person. And one of the things we’re very careful about is letting CEOs off the hook and letting them know that we understand the realities they’re facing. I think that’s what a lot of investors are doing. And again, with all of these things, a frontal sign solves a lot of issues.
How are the founders you interviewed dealing with these challenges personally right now? And how can the investors who support them help?
MickelsonMany founders, in my experience, know first and foremost that work-life balance is important before we offer any support. Most of them know that getting in good physical shape and connecting with people outside of work is important in order to have a trusted circle of contacts. And they know this; The problem is that they don’t have time to do it. They are interested in doing it. And they know it needs to be done, but they don’t have time. And I think investors will come in with a little license. So even if you don’t offer anything in terms of mental health benefits to your portfolio, stress founders just acknowledge what’s going on, give voice to what’s already happening, and let them know it’s okay to take a break or address these issues.
Upadhyay: Across the board, the bar is really low. I think most boards in Africa right now don’t need more damage. Most of my time is spent at board level to prevent additional work and stress for the CEO. So the first thing is don’t create unnecessary extra stress and extra work. Stop asking for useless metrics and things that don’t need to be done. Acknowledge how stressed the CEO is and how little bandwidth the team has, and then everything builds on that foundation.
Make room for the CEO to be human and let the CEO know that it’s a business imperative to talk about things that aren’t right, encourage honest conversation, and bring their whole selves to work. And it leads to a healthy organization so that many people do not leave in a burnt out situation. I think all of these things fall into the bucket of what the board can do, but don’t worry about getting started.
Mental health is said to go hand in hand with creativity, innovation and success. Is that always the case since there are few examples of sociopaths building innovative and successful companies?
Upadhyay: Empirical research shows that the more “touched” a person is by mental illness, the more successful they are! Think of it as a bell curve. Most entrepreneurs fall into the resilient-but-not-thriving bucket, at either end of which you’re rich or severely mentally ill. We tend to hear stories about extremes… suicidal… megalomaniacs… but the truth is, most founders fall in the middle, where if they learn to channel their strengths, they will succeed.
Despite being blessed with neural diversity, several protective factors may enhance founders’ ability to thrive. Having a high social capital, a good education and coming from a loving family – all things help. On the flip side, some preconditions can prevent prosperous development – lack of food or shelter, living in unsafe areas, lack of health care, etc. Not much can be changed, but we can influence protective factors such as increasing resilience, mental health support and addressing loneliness.
We’ve established the importance of founders’ mental health, but what about employees? Toxic work cultures are becoming more common, and often, they reflect the behaviors and attitudes of the founders. Shouldn’t founders also take their employees’ mental health seriously?
Mickelson: Yes, founders need to find their employees, most of them are from my experience. The most important thing you can do is lead by example. Showing employees that they are taking care of their safety (taking time off and getting a trainer) is something that should be valued.
The second thing you can do is create an environment where individuals can take care of themselves. They do this by encouraging vacation time, not emailing people on weekends, and offering benefits that support well-being (training for key employees, mental health benefits such as discounted medical care, etc.).
Finally, as part of building a great culture, founders need to think about ways to get people excited about the work they’re doing. Communicating the organization’s vision, providing learning and development opportunities for people to grow, clearly stating the organization’s core values so people know what the founder says, and encouraging teams to work in areas that align with their values.
Generally, I find that founders care more about their employees than themselves. They don’t always have the full toolkit to figure out how to do this. Founders underestimate the power they have in their companies and don’t always realize that people are watching and following them.
