Why we can’t afford to let founders flounder
Over the past six years there have been significant efforts to fast-track Australia’s startup ecosystem from many sides – including governments, universities, investors and corporations. These efforts have largely focused issues such as funding and skills, but a more holistic approach is needed to help founders and their startups scale successfully
On World Mental Health day, it’s an apt time to acknowledge the highly challenging environment of startup building, and the personal impact on the founders trying to build the next generation of Australian businesses. Various research studies suggest that entrepreneurs are 50 percent more likely to report having a mental health condition.
That’s why today we released our second annual research report looking at the physical and mental wellbeing of founders and entrepreneurs: Fitness, fulfilmentand foresight 2019.
The report finds despite the fear and stigma perceived by founders around accepting support their investors are in fact extremely supportive of founders and encourage them to seek out help where needed. Most VCs (76 percent) recognised the extreme importance of the health and well-being of founders and 100 percent of VCs understood there’s a link between healthy founders and the performance of their startups.
Furthermore, 100 percent of VCs said they’d be comfortable knowing that investment money was being used for physical and mental health support for founders within their portfolios. Over a quarter went on to note they’d expect founders to spend $200 or more on these efforts monthly.
While awareness of the issue is high and the intentions are clearly positive, a significant gap remains between people knowing the problem and doing something about it. Self-care is potentially a whole new discipline for founders to master.
We believe levers do exist to encourage a higher number of founders to accept support from their VCs. Thirty five percent of VCs reported they offer support services to their founders, such as professional development coaching, counselling and meditation. Additionally, 67 percent of founders said they would be willing accept support of this kind from their VCs. However, of the VCs that offer support, only a fraction (12 percent) reported their support services were taken advantage of by founders.
Dr Kari Sulenes, Executive Director of Project Atlas, believes within a decade it will be standard for VC firms to offer support: “whether it’s built in-house or if they’re offering money for [founders] to go outside, I don’t think that any venture firm is going to be able to ignore that trend.”
As a community, we need to identify who is responsible for what, and how we can do more to support founders. All of us in Australia’s startup ecosystem have a role to play in building a healthy and balanced ecosystem of support – not just to build a standard baseline of founder wellbeing, but to create an environment that fosters excellence and breeds the high performance founders Australia needs to compete on the global stage.
We’ve universally acknowledged that founders need support along the entire journey to success if Australia is going to build more globally successful startups. But right now, the startup ecosystem is unbalanced. Much of the current support comes from accelerators, incubators and co-working spaces, but there’s very little out there for the founders of startups who have reached post series A or series B stage.
A founder’s personal wellbeing, their physical and mental health, informs how they lead – everything from how they communicate, how they hire, to how they foster and build the culture necessary for a startup to succeed. Our future economy depends on innovative people with successful businesses. We can’t afford for them to needlessly fail. We must do more to support Australia’s startup founders – to help them achieve the sustained high-performance needed to thrive in a highly challenging environment.