(Founder) Burnout

🔖 Contents on this page:

• ⚠️ Founder burnout is prevalent
• Work ethic of founders
• External pressures
• 🫂 The consequences are obvious
• Health Implications
• Long-Term Vision vs. Short-Term Gains
• Impact on Performance
• 💁🏽 Preventative measures

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.

⚠️ Founder burnout is prevalent

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.

36% of founders suffer from burnout, 13% of depression and 10% of panic attacks

Work ethic of founders

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.

External pressures

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.

🫂 The consequences are obvious

Health Implications

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.

Long-Term Vision vs. Short-Term Gains

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.

Impact on Performance

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.

💁🏽 Preventative measures

Please note that this list is not exhaustive and there are many more ways to cope with stress - if you think we missed an important detail, feel free to ping us!

1. Management is key Your company is your baby and it can be hard to let go of control. Having a strong management team that you can trust is crucial for growing startups. Delegating tasks to them not only streamlines operations but also harnesses their expertise, ensuring that the business thrives in all aspects. This trust-based delegation fosters innovation and allows you to focus on broader strategic goals.
2. Prioritise Founders always have 20 things left on their to-do lists. On a business side, try to instead focus on 2-3 high priorities for the day and learn to ignore. On a personal side, distinguish between mandatory life activities (e.g. dealing with personal health challenges) and optional ones (e.g. hobbies). Recognizing what's truly essential and what to delegate can help in allocating time and energy more effectively.
3. Speak up and connect with peers If you’re feeling stressed and overwhelmed, seek support. Be it from a close friend, co-worker or a professional. Talking to people who have been through similar situations can provide valuable insights. Many young entrepreneurs are often challenged by the time-consuming nature of tasks like fundraising. Peer groups, like the Entrepreneurs’ Organization, can offer support and guidance. Invest in mentoring, coaching or even therapy - it pays off.
4. Accept reality Founders need to accept that the entrepreneurial journey is filled with highs and lows. Demands on one's time come infrequent and can't always be influenced. Being realistic about these restraints and planning ahead can help in managing them better.
5. Find a healthy balance It’s not rocket science, but regular sleeping hours, a healthy diet and physical activity are all important for mental health. Look at your founder career like an athlete looks at his professional career - training 16 hours a day will wear you out, not eating properly will take away the fitness to win the season. Exercise, rest and nutrition can help you release stress and build up the stamina to run your company.
6. Check-in on each others mental status

While you probably speak with your co-founders almost 24/7, conversation easily ending up turning only about business related topics. Don’t forget to ask each other „How are YOU doing?“!

Thoughts? Feedback? Something missing? Please let us know: andreas.goeldi@b2venture.vc