[The New Indian Express] Why Investors Should Support Founders’ Mental Health
Entrepreneurial journeys are challenging. There are peaks of extreme happiness and moments of utter despair and hence entrepreneurs draw on a special kind of mental energy. They go after the impossible.
As a founder, if you’re not training for a marathon, you may survive, but it would be nearly impossible to thrive. And the implications on your mental health could be catastrophic.
As a venture investor, I’m acutely aware of how today’s fraught, fast-moving market can elevate burnout risks. A global pandemic and its resulting impact on global economy has heightened the pressure on investors even further.
This is particularly true in India, where years of accelerated growth have suddenly slowed. Since 2016, when the government prioritized support for entrepreneurs, Indian startups have multiplied from several hundred to more than 80,000 today. New capital flooded in and, according to Dealroom, India ranks third behind the US and China-and ahead of the UK-for venture investment. In 2022, the country added 23 new unicorns to the world, versus 11 from China. And according to CB Insights, there’s been a 75% decline in first-quarter funding for India’s startups compared to a year ago.
To help mitigate pressure, investors should take responsibility to support founders and help build up the communities where the companies they are creating do business.
Here are five strategies I’ve seen work across the world:
1. Practice compassion; volunteer experience
Acknowledging a person’s stress helps alleviate it, especially during uncertain times. Founders face intense pressure, long hours, and constant decision-making which takes a toll on mental and physical health. Tech founders may feel an added pressure from being the first to venture into technology or from a lack of industry mentors or support systems. Schedule regular check- ins with founders and about their well-being. Offer insights from personal experiences with other entrepreneurs that may spark ideas or provide solace.
2. Support time out of the office
Work-life harmony feels unattainable to founders, but investors should strongly encourage taking time to recharge – through healthy breaks, networking and vacations.
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.
3. Bring in outside resources
Investors can contribute to founders’ mental health through professional coaching services, peer-to-peer support groups, and providing access to counselling. Look for leadership support groups for founders or peer-to- peer exchange groups. Peer groups form a safe place for founders to have conversations with someone they believe understands them. One-to-one coaching or online support sessions can prove helpful as well.
4. Encourage diversity and inclusion
Studies show that diverse workplaces allow for more ideas and increased productivity. In India, two fintechs with female founders were just named to Forbes Asia 100 to Watch annual list Apnaklub, a B2B wholesale platform, connects retailers such as kiranas to a wide range of consumer goods and brands while Kaleidofin, a wealth-tech platform, provides financial solutions to help banks and other orgs provide goal-based solutions for their customers and employees. Both companies started with unique perspectives and built diverse teams to better understand customers’ needs. As investors, it’s important to seek and invest in underrepresented founders who provide new perspectives on problem-solving.
Listening is one of the most important things an investor can do. Though there may be a range of problem-solving tools available for founders, they will only be effective if we understand founder’s challenges. Listening encourages founders to communicate openly and consistently with investors. Open dialogues between founders and investors can help create trust and long-lasting relationships.
At Flourish, we are interested in exploring how founders learn to lead because that is what - apart from passion - creates value. By supporting founders - especially first-time fintech entrepreneurs - and encouraging them to create sustainable, innovative and inclusive cultures, investors can help improve the outlook for startups to deliver long-term financial returns even if the investment climate undergoes change.