Founder Burnout: Why A London VC Is Taking Care Of Its Entrepreneurs

In addition to providing capital, should VCs be offering a degree of pastoral care to their portfolio founders?

Well, even when assessed in purely commercial terms, the answer to that question might well be yes. It can take many years to steer a startup business to the point where an exit can be achieved and during that time a lot can go wrong. The entrepreneur can lose focus, burn out or simply find that he or she no longer has the heart or will to give 100 percent to the job in hand. So if a VC wants to see a return on its investment, it makes sense to look after the geese that have the potential to lay the golden eggs.

And according to a report published last week by Balderton Capital – a London-based VC investing in early and growth-stage European businesses – there is evidence that some founders at least are struggling to cope with the pressures and challenges of growing their companies in an increasingly competitive environment. Coinciding with the research findings, Balderton has launched its own “Wellbeing and Performance” platform” designed to provide help and support to its cohort of portfolio entrepreneurs.

I spoke to Suranga Chandratillake, a General Partner at Balderton to find out more.

The Work/Success Equation

It will come as no surprise to anyone that founders of VC-backed businesses tend to be driven people who work long hours. Indeed, 90 percent of those taking part in the Balderton study acknowledged that they pushed themselves to work harder and longer. A slightly smaller subset – 84 percent, to be precise – said entrepreneurs were expected to work hard in order to be successful.

So where do those expectations arise from? Sometimes from investors, it seems. Just over half of the survey’s respondents said investors and board members put them under pressure to be constantly available.

Diminishing Returns And Poor Decisions

This is where things begin to get tricky. People who start their own businesses usually aren’t afraid of hard work and a long-hours culture can become a kind of indicator of commitment. But spending too much time in the office can be at worst counter-productive and at best a bit pointless.

More than four-fifths of of the entrepreneurs questioned said there were diminishing returns from “simply putting in more hours.” And if you step back to look not only at working culture but also the stresses and anxieties associated with running a business, then there is a real danger that performance will suffer. Entrepreneurs are very aware that burnout, anxiety and depression are the bedfellows of poor decision-making.

So how do you get the balance right between working hard and pushing yourself to the point where things begin to fall apart? And if you are one of those people who knowingly stays too late in the office for no good reason but carries on doing it anyway, how do you change that behavior?

As Chandratillake sees it, investors can play a role in supporting founders through difficult and stressful times but this is often on an informal basis. “For many years, as a firm, we have helped founders and CEOs with the challenges they face,” he says. In practical terms, that could simply mean having a conversation that addresses a particular problem.

The firm’s Wellbeing and Performance platform has put something more structured in place. As Chandratillake explains, the initiative is aimed at providing help in three areas – health and wellbeing, coaching and peer-to-peer conversations. But what does that look like in practice?

“We have a physical program run by medical experts,” says Chandratillake. “They will put you through tests and make recommendations – for instance on diet, exercise or sleep.”

Alongside that, Balderton has hired an executive coach who will provide a program of meetings to discuss management and decision-making issues with individual founders.

And finally, Balderton has arranged for startup leaders to meet in groups of between five and seven. “We’ve organized it to bring together CEOs living in the same cities. It’s a program where founders from non-competitive businesses can connect with each other and discuss common problems.”

As Chandratillake acknowledges, the initiative is open only to CEOs and founders in the Balderton portfolio, but he expresses a willingness to discuss similar programs with other VC firms.

A Long Journey

But is this initiative simply a good deed in a wicked world or is it driven by commercial logic?

“We are not being selfless,” says Chandratillake. “We invest in businesses and the journey can take 5, 10 or 15 years. During that time, anything we can do to help the CEO remain focused is a positive.”

The scheme is voluntary and Chandratillake stresses that while Balderton pays for health checks and the coaching, the firm is not involved at a personal level. For instance, discussions with medical professionals or indeed the executive coach are confidential. “So we won’t know about your cholesterol level or anything like that,” he says reassuringly.

That should encourage more founders to take part and it might just provide a spur to adopting habits and practices that improve performance and reduce stress. Given that 72 percent of respondents said they found it hard to prioritize wellbeing and 61 percent said finding support was difficult, external help could prove useful.