We can choose to see founders simply as a means to an end (generating profits) or we can see them as the whole people they are and think about the importance of their mental health for the benefit primarily of them, but also of their entire company. The entrepreneur is the leader of his team and his state of mind, his energy, has a direct impact on the team that builds the business day by day.
Psychiatrist Michael A. Freeman of the University of California at Berkeley published a study in 2015 which found that 72% of entrepreneurs in the United States had some type of mental health problem and are twice as likely as the general population to suffer from depression; three times more likely to struggle with substance abuse, 10 times more likely to have bipolar disorder as well as 2 times more likely to have suicidal thoughts; these numbers were pre-pandemic.
Today there are undoubtedly more factors that affect emotional stability, so the results could be higher.
Behind the success stories where there are trillion dollar valuations, many founders struggle every day and face the pressure of having to become a unicorn. The conflict comes from having to operate in a world where you are perceived to have to get bigger faster, instead of being profitable to seek a high valuation.
However, we do not understand that before the icons of the new digital era that are on magazine covers like Elon Musk, Steve Jobs or Bill Gates triumphed, they went through bouts of anxiety and despair, moments in which it seemed that everything would collapse.
Little is said about this, it is not well seen that a founder accepts his substance abuse or even that he feels depressed, this leads to little diagnosis and treatment. Talking about mental health among founders remains taboo.
Addressing the mental health epidemic is imperative, and for VCs it should be a critical part of reviewing when doing business. There are cautionary examples, such as Theranos and its founder Elizabeth Holmes, where some of the biggest investors went on a gold rush with a businesswoman who promised much more than she could create, as shown in the HBO documentary “ The Inventor: Out for bod in Silicon Valley”.
One of my reflections after seeing it is that the mental health of the founders does not enter into the due diligence What investors do when we review a potential investment. A 19-year-old promising to be the next Steve Jobs, who had dropped out of Stanford to create her dream of achieving health for all by studying just a few drops of blood, turned out to be a major fraud.
No one ever asked Holmes if she was lonely, if she needed help, or if at 20 she was capable of dealing with more than 800 employees. Her pressure made her lie and lie to herself to such an extent that it all ended in disaster.