It is unfortunate that mental health is not given much attention in the world of entrepreneurship. Sometimes, these issues are discussed subtly in the context of the founder feeling worn out or struggling to strike a balance between work and personal life, and the founder who is experiencing burnout may go through various stages. Therefore, in order to take immediate action to address burnout, you must first determine if you are on the verge of it.
Case Study
Mike founded a rapidly growing startup valued at around $7 million, and as the company grew, Mike went through two fundraising rounds: the first was to raise money from investors who serve on the board, and Mike retained approximately 32% of the equity ownership, while board members took more than 57% of the profit.
Then, Mike wanted to shift from rapid progress to focusing on more incremental progress funded by revenue rather than venture capital to reach profit, but his board of directors wanted to continue working in light of the company's rapid progress.
Although both situations have advantages, Mike's main challenge was his increased anxiety and dread of asking for more money from investors. Although there is a wealth of information available to entrepreneurs about fundraising and dealing with rejection, it frequently fails to address the underlying complications of clinical anxiety and depression.
Warning signs
Mike eventually began going to therapy and taking medications to help stabilize his psychological state. However, he refused to disclose his condition to the board of directors, claiming that doing so would jeopardize his ability to lead the company. He recalled other company founders who kept their mental health issues hidden for fear of the reactions of board members.
Mike's condition suggests that he has a pessimistic bias, which is the over-sensitivity to potential threats that is common in people suffering from anxiety or depression. The pessimism bias is one of many errors that result from making decisions based on how our brains are wired. It's what cognitive neuroscientists and behavioral economists call "cognitive bias," and fortunately, recent research in these fields shows how to overcome these mental barriers with practical strategies.
Mike's pessimism didn't help; the council persisted in their pressure, and despite his wise decision to seek professional help, his anxiety and stress impaired his ability to fundraise.
"Timing is Everything" turning point
Mike was on the verge of collapse at this point. He finally decided to tell the council about his psychological state, and the outcome was fantastic. Everyone was very supportive, and many of the members who pushed him said they did so out of concern and fear of larger competitors who might try to capitalize on the startup's early mover advantage; this is because they have seen many of these scenarios, so they were trying to make quick progress with investor capital.
One of those board members also struggled with pessimism, so he approached Mike, and they agreed to abandon fundraising goals in favor of more incremental growth.
However, the story did not end happily; Mike was unable to achieve these objectives despite his extreme exhaustion. He had lost interest in the company and despised getting up for work. However, he believed that he could continue, but no matter how hard he tried, he could not achieve what he desired, so he resigned and offered his shares for sale to the remaining investors at a low price.
Burnout came too late
If Mike had shared his psychological issues with the board of directors, the situation could have been drastically different. As a result, the company wouldn't have completely collapsed, and the problem of turning rapid progress into gradual progress could have been resolved by making an effort to raise money. This would have freed up Mike to concentrate on his passion for customer satisfaction and brand building rather than being forced to deal with the task he despises the most, which is asking investors for money.
We hope that startup founders will take this story's lesson to heart and persuade key stakeholders to be more aware of and concerned about mental health. This story should also serve as a wake-up call to startup leaders who are hesitant to disclose their mental health issues to major investors and board members. Furthermore, it serves as a warning to major investors and board members to encourage founders to prioritize their mental health.
Defending one's mental health while remaining strong
Living with a turbulent and uncertain future will only increase stress and anxiety, and we cannot afford to lose talented startup founders by ignoring the risks of mental health challenges. As a result, both founders and employees should encourage mental health transparency, as well as training on how to support colleagues in times of distress, and should not regard mental health challenges as a stigma.
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