(Founder) Burnout

Being an entrepreneur, particularly a founder of a fast growing tech startup, is obviously a hard job. Anybody who chooses this career is probably aware that it comes with long hours, many ups and downs and plenty of challenging situations. Thus, founder burnout is (unfortunately) no scarcity.

In his article, our Partner Andreas Goeldi dives deeper into the disconnect between prevalent burnout and the startup culture of relentless optimism. Ask any founder how they’re doing, and they will probably tell you that everything is great. Killing it. Growing like crazy. Super excited about the progress. This mindset is of course needed to build a company and conquer all the many obstacles that a startup faces. Founders, CEOs in particular, have to project optimism to convince customers, employees and investors that this is going to be the best company ever.

But this often obscures the fact that life as an entrepreneur is challenging — particularly if you are expecting to have a personal life outside of your professional existence. This tension leads to many potential issues — therefore, it is very important to pay attention to your mental health.

As published in a recent study by our colleagues at Startup Snapshot, 72% of founders report an impact on their mental health after founding their company. Also, our colleagues at Balderton did a great job in quantifying further findings.

Founders, especially of VC-backed businesses, tend to be highly driven individuals that in many cases have shaped their career over years to reach their current goals. This means that even before they became entrepreneurs, working long hours was part of their lives - at school, university or at a previous job. Even outside of the startup world, 97% of small business owners work on the weekends. Their intrinsic motivation, often tied to their equity shares, pushes them to work harder, sometimes at the cost of their well-being. This commitment is further highlighted by the fact that almost 60% of founders sleep less since starting a startup - with the percentage of founders sacrificing sleep is even increasing as the company gets more mature.

Venture Capitalists (like us at b2venture) play a significant role in the startup ecosystem. We provide the much-needed capital to bring startups on to moonshot growth trajectory, however we also have the potential to contribute to founder stress. Growth targets, constant updates, profitability goals, all this increases external pressure on the founders. As a consequence, as much as 90% of founders do not talk about their current stress level to their investors.

🚀 On the opposite, this low level of disclosure can be a huge upside potential as investors are often connected to people that have overcome these tremendous challenges. At b2venture, our angel network can support founders in these situations as our community gives hands-on advice to our portfolio companies.

Burnout doesn't just affect one's professional life; it has severe health implications. Ignoring these signs and continuing to push oneself can lead to severe physical and mental health issues. The balance between work and personal life is crucial, not just for the success of the startup but for the well-being of the founder.

A burnt-out founder might prioritize immediate results over the company's long-term vision. This approach can be detrimental to the sustained growth and success of the startup.

Just “working harder” does not increase efficiency, it (obviously!) leads to the opposite. 83% of founders see diminishing returns from just putting in more hours. Additionally, burnout, anxiety, and depression can severely impair decision-making abilities and creativity, leading to suboptimal business choices.