Why mental and emotional health is crucial for both entrepreneurs and investors
Rōnin Team on iunie 17th, 2022 / Founder Resources, Investing Insights, Investor Resources / 11 min read
The role of entrepreneurs is essential to the economy and society as a whole. They create many new jobs and increase a country’s income, come with a new approach in terms of products and services, stimulating progress and creating general prosperity. And that’s not all. They have a massive contribution to greater missions aiming to impact the world of the future and shape the next generation to contribute furthermore.
But all these great things come with a lot of pressure, bringing entrepreneurs’ cognitive, emotional, and behavioral vulnerabilities. And this almost always has an impact on the investors’ side, too. Unfortunately, these things are barely talked about.
What are we dealing with?
A UC Berkeley study found that 72% of entrepreneurs have some form of mental health problem. Of the entrepreneurs they studied, 30% had a history of depression, 19% had ADHD, 12% had substance abuse problems, and 11% reported having bipolar disorder. Looking at the last few years, we see that mental health is being given more attention.
Many factors that contribute to mental health are hereditary and family history of things like bipolar disorder, depression, and substance abuse. But at the same time, it’s about the lifestyle of being an entrepreneur. Both as a founder and as an investor, these statistics are worrying.
But what makes these numbers overwhelmingly high in the business and investing world?
- Toxicity of hustle culture– this continuous toxic environment that makes you feel guilty if you spend too much time with something unrelated to work—this fuels cognitive dissonance. As a founder who sometimes has to do everything, but also as an investor to feel in control of things, you end up feeling overwhelmed, contradicting your real goals, and losing sight of „why.”
- Unattainable standard– online, in the press, in your friends circle, all you hear are these stories about „overnight success” and „crushing it.” These stories come with unimaginable pressure, with the stress of giving more to achieve that success.
- The burden of being a one-man show– as a founder of a start-up, you get to do sales, marketing, HR, and administration and be a speaker at events. On top of that, you also invest all of your energy and time in raising money to grow and expand. And just like that … you are a one-man show. But even as an investor, you are not far from this role.
- Feeling Not Seen, Not Heard, Not Understood– is a familiar feeling for founders and investors. First of all, remember that you are not alone. As a founder, you should proactively build trust with the people around you, including the board and investors. Then, regardless your status, don’t forget that you need the support of friends and family, but with so many entrepreneurial friends who may know what you’re going through, they’ve gone through this phase at some point. Empathy and support will come unmistakably.
- Start-ups are alienating – the whole ecosystem of a start-up often makes the founder spend less time with family, friends, and acquaintances. Moreover, some even have to move away from home. Stress is a growing company that can be doubly felt for them, and these things come with a burden and a pang of guilt.
Most common disorders amongst entrepreneurs
The researchers found that 49% of entrepreneurs who responded to the study had at least one mental illness such as ADD, ADHD, bipolar disorder, addiction, depression, or anxiety. About a third of entrepreneurs had two or more mental conditions.
But is it just a coincidence that the brightest minds are sometimes the ones who struggle the most? Michael A. Freeman of the University of California does not think so: „People who are energetic, motivated, and creative are more likely to be entrepreneurs and more likely to have strong emotional states,” Freeman says.
Among the most common disorders encountered in entrepreneurs are:
Anxiety is a feeling of restlessness, such as worry or fear, which can be mild or severe. Everyone has anxiety at some point in their lives, but for entrepreneurs, it can be a general condition. This untreated can lead to depressive episodes, insomnia, low performance, digestive problems, chronic pain, decreased quality of life, social isolation, and even substance abuse.
Stress – It is a normal human reaction that happens to everyone. The human body is designed to experience and react to stressors. In contrast, long-term exposure to stress can lead to depression, anxiety, personality disorders, cardiovascular problems, burnout, and chemical and hormonal imbalances in the body.
Depression – It is a severe and quite common medical disease, unfortunately. This causes intense feelings of sadness and/or loss of interest in activities that once made you happy. Its effects can be very serious – from serious chronic problems to problems in interpersonal relationships, drug and alcohol addiction, and even suicide. But fortunately, it is treatable.
ADHD is a mental disorder that combines difficulty with attention, hyperactivity, and impulsive behavior. The consequences of ADHD can be low self-esteem, relationship problems, poor performance, depression, and anxiety.
Impostor Syndrome is defined as doubting your abilities and feeling like a fraud. It disproportionately affects people with significant performance, who find it difficult to accept their achievements. „Impostor syndrome contributes to psychological stress, ongoing self-monitoring, increased self-doubt, and persistent fears of failure,” says psychologist Dr. Audrey Ervin.
Bipolar disorder – causes extreme mood swings that include episodes of emotional mania (mania or hypomania) and decreases (depression). Untreated can lead to decreased energy, feelings of helplessness and worthlessness, reduced self-esteem, and suicidal thoughts.
Substance Abuse – It’s not just about illegal drugs. Improper use of painkillers, alcohol, and other legal substances can also harm your health. People who are constantly abusing substances often face performance difficulties, health issues (including mental health), and poor-quality relationships with loved ones.
The mental illnesses mentioned above can have a profound effect on the life of an entrepreneur. They often lead to burnout, conflicts with co-founders and management, can lead to a toxic culture in the company, an inability to hire new talent, moments of missing out on specific important meetings and presentations, and even poor decisions.
Noam Wasserman writes in his book „The Founder’s Dilemma” that „65 percent of high-potential companies fail because of disputes between co-founders, revealing some painful truths that all founders encounter at some point crucial in business.” This can be caused by a period of tension and mental and emotional imbalances on the part of entrepreneurs.
Looking after your mental and physical health
Be kind to yourself. It is normal to feel overwhelmed, tired, misunderstood and lost. To think that you have ‘Run out of gas’ emotionally.
„The one thing that I wish I could get every entrepreneur to understand is that their emotional fitness & energy is their most important asset,” Nataly Kogan says in her podcast with INC.com. „It’s not the money, and it’s not the team. Everything else depends on it.”
Seema Al Mansoory tells Entrepreneur magazine that starting a business comes at an enormous psychological price: „When I ventured into the start-up realm, I was a very ambitious and driven 27-year-old woman, and I was ready to dive headfirst into the business world – but I wasn’t aware of the importance of maintaining my mental well-being through it all.”
Start taking care of yourself. Addressing mental health issues in entrepreneurship is a moral imperative – for founders to continue the story of start-ups, and for investors, it could be a business function. Let’s develop a little „a business function.” Through the founders’ efforts, passion, and nerves, venture capitalists make a living. The options are: we can see the founders as a means to an end – with the chance to fail big time due to negligence for mental health – or we can see them as the whole people they are and support them.
Let’s see how we can take care of ourselves and our fellow entrepreneurs:
Talk about what you feel, what you think. It’s okay to feel that way, and it’s okay to have doubts. It’s okay to feel like you’re fighting for your mental health. It’s really okay. This is your journey; tell the whole truth as you feel it. And encourage others to do it too.
Founders are often labeled as having raised $5 million in funding and enjoy that money. No, that money is for their business. Perhaps part of the funding rounds should be allocated to the founders themselves, and investors should hold the founders accountable for investing in their well-being and development. Founders should include a line item in P&L for health or personal care.
Surround yourself with the right people
The journey into the entrepreneurial world is different from any other journey. So only those who have gone through and are going through this can empathize with you and your feelings 100%. You can’t expect your family, friends, or significant other to fully understand your emotional roller-coaster, mainly because they don’t share your experience.
Surround yourself with people who can genuinely understand you. People who don’t pressure you to perform and forget about emotional issues, people who can be there for you and help you with a piece of advice or a constructive discussion. You have to be vulnerable to start taking care of yourself.
Start putting yourself first when it comes to your business
Often, founders dedicate 150% to their business: they put their whole soul, bank account, and identity at stake. Where is this going? The statistic says 90% of start-ups fail. Thus, make sure that your situation is taken care of. How do you do that?
- Pay yourself first.
- You have other income streams (for example, a rented property).
- When you raise money, get a salary.
- While you build your start-up, consider a secondary hustle.
Don’t forget the mind-body balance
Mental, emotional, and physical well-being are closely linked. Just as lack of exercise or poor nutrition can lead to mental imbalances, mental health problems can lead to abuse. See? It’s a vicious circle.
Make sure you pay attention to exercise, watch your diet and do mindfulness exercises.
Also, don’t forget about therapy. We no longer live in times when therapeutic processes were taboo subjects, and the reluctance to ask for specialized help was the answer.
Take time for yourself. Read a book that may be an inspiration, read an article on other entrepreneurs who have gone through what you are going through, and listen to a podcast even when commuting to the office.
There are so many stories on the internet about entrepreneurs who have been on the verge of failure or even failed because of mental health:
- Bradley Smith – CEO of Rescue One Financial
- Dan Murray-Serter – Co-Founder of Dawn
- Seema Al Mansoory – CEO of EVA Interiors
- Grégoire Vigroux – Co-Founder bonapp.eco
„Entrepreneurship affects people with and without prior mental health conditions, and personality has something to do with your vulnerability,” says Michael A. Freeman.
Your mental health is not just a „fix” or a „nice-to-have thing.” It’s a must-have, whether you are a founder or investor. For both of them, it can be tricky.
For the founders, the hard part is starting from the point of that great idea that will revolutionize an industry. Comes with stress, pressure, meetings, chaotic eating, a few hours of sleep, business trips, and more.
„Building companies is inherently hard mentally, physically, and emotionally, but our ecosystem is a toxic one, with dozens of factors all contributing to make it even more so. We are quite literally killing ourselves and thereby sabotaging our long-term competitiveness. There are tangible actions each one of us can take to start fixing this toxicity, but at the end of the day, I believe most of those actions boil down to treating each other and ourselves as human beings. If we recognize and embrace our weaknesses and support one another in our imperfections, we will start seeing a healthier, more sustainable entrepreneurial ecosystem,” Jake Chapman, managing partner at Alpha Bridge Partners, in his post for TechCrunch.
But it is just as difficult for investors. They have to make difficult decisions about what they invest their money in. They put their reputation at stake, and sometimes they can take part in management decisions in the business they have decided to support. Nonetheless, another important aspect is that investors are also playing a crucial role in supporting the founders in overcoming their mental health issues, as their input can directly influence their performance and the potential of a business. In the end, founders and investors are both in the same boat.
Jerry Colonna, Coach and former VC says, „a start-up’s culture evolves primarily from the founders’ personalities, behaviors, and interpersonal dynamics.” Studies show that happiness and mental health can increase financial performance.
In the long run, there is one main focus: to stay healthy and in good shape to fully enjoy what you’re aiming for every day and celebrate this journey we call life.
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