[Inc. Magazine] Founders Must Prioritise Mental Health

Why well-being should matter to investors who want to nurture businesses in Africa.

By Charissa Cassels, Journalist at Inc.Africa

Interview originally posted on Inc.Africa

72% of founders experience adverse effects on their mental health during the entrepreneurial journey.  The April 2023 report from Startup Snapshot entitled “The Untold Toll: The Impact of Stress on the Well-Being of Startup Founders and CEOs” reveals that many individuals conceal their stress. This could lead to significant health and well-being costs in the future.

Entrepreneurial journeys are challenging. There are peaks of extreme happiness and moments of utter despair. Inc.Africa has been on its startup journey and frequently writes about emerging entrepreneurs, so I wanted to understand an investor’s role.

Here’s the conversation I had with Ameya Upadhyay, venture partner at Flourish Ventures, and Lisa Mikkelsen, the firm’s Head of Global Human Capital. We discussed the need for VCs to invest in African founders’ mental wellness. For the past ten years, Flourish Ventures has invested in African startup businesses and founders’ mental health.

“Almost all venture-backed tech founders are dealing with high stress levels, loneliness, and the potential for burnout.”

Why is mental wellness important to the African startup ecosystem?

Entrepreneurs draw on a special kind of mental energy. They go after the impossible. They have a higher bias toward mental health conditions. Startup life is inherently highly stressful.

African startups are playing the long, long game. As a founder, if you’re not training for a marathon, you may survive, but it would be nearly impossible to thrive.

Successful founders we know are intentional about how they spend their time, aware of their needs for recovery after sprints or stressful periods, and consistently tap into supportive social networks.

They are developing their teams so they can step away from work when needed. They build conscious cultures with solid values to attract and retain the best people. It is undeniable that well-being is essential for success.

What are the common mental health issues faced by African founders?

Almost all venture-backed tech founders are dealing with high stress levels, loneliness and potential burnout.

In Africa, this is further exacerbated by additional environmental factors, including political instability, currency devaluations, government regulations, and day-to-day challenges like power outages.

According to the research by Dr. Michael Freeman, CEO of Econa, the Global Center of Excellence for Entrepreneur Mental Wellness, these precarities increase vulnerability to mental health conditions.

Investors can support founders with mentoring, coaching or leadership training. Our portfolio founders find significant value in peer support groups, such as monthly CEO circles or annual retreats, where founders can recharge and create honest, meaningful relationships with others facing similar challenges.

How do bank failures, like SVB’s recent collapse, impact founders?

It’s been particularly distressing for founders because it feels like something that should have been secure for day-to-day operations is not.

Insecurity, in all shapes and forms, heightens our stress response. When faced with not making payroll, that is any founder’s worst nightmare. In addition, this has signalled a growing set of economic concerns that impact future funding for entrepreneurs.

Anyone predisposed to anxiety is likely to feel destabilised after this collapse. How do you address this and other massive crises – i.e., climate change – when it’s beyond anyone’s control?  It’s a great question; we don’t think anyone has a single answer.

There are steps we can take to help mitigate some stress: encouraging talk therapy – with peers or a professional. It’s important to actively focus on what is in our locus of control. With resilience training, founders can learn to practise emotional regulation.

Other forms of mindfulness – like breathing to stimulate the vagus nerve – are proven to cause a physiological response that relaxes the body.

The more founders know about their well-being, the more tools they will have when unexpected stresses arise.  Learning how to better respond to stressful situations is far more effective than expecting to eliminate stressful situations.

How can investors help founders prioritise mental wellness?

It’s important to understand that prioritising mental well-being does not come at the expense of making business decisions or mitigating risk. The opposite is true. If we prioritise mental well-being, we are much more likely to make better, more informed business decisions because there is a level of trust.

After investing, founders know more than the investors, so a strong relationship is key for information to flow more transparently. All startups will have ups and downs and times when things are not going well.

That is natural and to be expected. To the extent investors are privy to information, good or bad, they are better enabled to provide sound advice and proactively raise alarms.

How do economic downturns impact mental health?

As with any global crisis, startups are some of the most vulnerable businesses, especially during economic downturns. In our portfolio, we have worked with companies dealing with layoffs during the pandemic and financial crises. There are three things we encourage other investors to look at as well:

1. Connect 1:1 with founders and understand how this impacts them – from a business and personal perspective. Listening and validation are two of the most powerful tools in our resilience toolkits.

2. Have an experienced coach who can advise founders on best practices to handle layoffs. Most founders we’ve worked with feel that conducting layoffs is a career low point. They feel like personal failures though they want to treat their team with respect and dignity – both those who are laid off and those who stay.  Coaching founders on how to have individual and team communications is an effective source of support. Some of the most valued conversations occur when you allow founders to practise their speeches, give them constructive feedback, provide benchmarks for offering post-layoff benefits and implement retention strategies.

3. Provide a peer network and safe space for regular conversations is something any investor can offer. Founders need each other. It’s lonely to be a CEO. There are some conversations you can’t have with your investor or team.

There are dozens of CEO peer groups out there, and we have seen our founders build lifelong friendships.

How can investors tackle the mental health stigma in Africa?

First of all, we should start talking about it!  We’ve had many conversations with our African founders who have explicitly asked, “Can you please talk to our other investors about this [mental health]?”

A big part of normalising any stigma is through conversation. You won’t hear founders talk about mental well-being if investors are not inviting the conversation. If it’s taboo and feels like it could impact future funding, why would anyone bring it up?

As investors, we have three things to do. First and foremost, it’s time to build our empathy skills. While it’s human nature, empathy is also like a muscle we can exercise.

Unfortunately, power has an inverse relationship to empathy, meaning that the more power someone has, the harder it becomes to walk in someone else’s shoes. Investors can participate in boot camps, classes and programmes to build this skill.

Second, investors need to be similarly vulnerable and share. This doesn’t mean telling founders all our deepest secrets, but it does mean opening up and communicating on a human level.  Again, research shows vulnerability is crucial in building trusted relationships.

Third, become better listeners. How often do we ask, “How are you?” And do you mean it? Double-click on surface answers to get to the core of what is happening with our founders. We need better conversations that go beyond the business.

Get to know your founders: What is their history?  What have they experienced? What was their upbringing like?

How can investors and founders ensure mental wellness initiatives are integrated into their relationship?

Wellness should be integrated throughout all points in the entrepreneur’s journey. Open, honest and transparent conversations are imperative in the pre-investment phase of diligence and discussions.

Values should be aligned, and efforts made to create a strong foundation and lasting relationships. For investors, wellness initiatives can be part of the portfolio support offerings. There are so many ideas coming to fruition.

From peer groups and leadership workshops to coaching and resilience training, there is a lot investors can offer without playing the role of therapist.

Healthy founders build healthy teams. If your founder can be a role model for well-being – and share what they find is difficult – they will set the tone for their employees.

In addition, investors should be building empathy skills. Consider intentional training, taking master classes on compassionate investing, understanding what it means to be in power, and getting feedback from founders on how to empower them to be their best.

What practical steps can African founders take to prioritise their mental health?

There are several things founders can do, especially to build resilience. We partner with the Resilience Institute to create a robust curriculum for our founders and give them access to tools and resources.

With Reboot, we offer monthly CEO circles to encourage regular peer conversations. A neutral third party facilitates these so founders can talk about whatever is on their minds. We have an incredible global slate of coaches and offer stipends to cover some of the costs.

Finally, work-life harmony feels unattainable to founders, but we strongly encourage taking time to recharge. As investors, we lead by example and ask our founders what they are doing to be their best. Founders have a lot to do, so sometimes taking personal time feels like adding one more thing to their list, but it is time well spent!

It also signals to employees that taking personal time is acceptable and encouraged, and this role-modelling, in turn, impacts the culture, which creates a virtuous cycle.

Finally, there is no substitute for professional mental health services. We offer therapy as a benefit for our employees and encourage our companies to do the same.

It’s notoriously difficult to find and access mental health support in all regions, but like any kind of health maintenance, it has no substitute.