Ethics Calling: Accelerators & VC Firms, You’re Up — Do Better
Note: Article originally written in July of 2015, but published in October.
Today it was announced that yet another founder has committed suicide, under the buckling pressure of all things startup. Possibly other stuff, too — anguish over her family’s shunning after she left Hassidic orthodoxy to pursue her dreams, is suspected by friends — but launching a startup leaves absolutely no room whatsoever for coping with personal trauma, or other life experiences that make us human. Then, there’s the known phenomenon (but not nearly often enough discussed) of Founder’s Terror. And the research-proven fact that entrepreneurs & business leaders are statistically more likely to experience mood swings and severe bouts of depression, clinical anxiety, and the clinically obsessive thinking that in its worst moments can lead to suicide. Inc. Magazine’s article The Psychological Price of Entrepreneurship has been lauded as one of the best, on the subject.
I’m getting really, really tired of all the damn conversations on founder depression followed by zero action. I’m tired of the mental health disparities in startupland, despite no disparity at all in the most benign of heavily invested in app-based services, from meal delivery to dry cleaning and garbage management.
I’m tired of conversations with (sincerely) well-intentioned VCs insisting they urge their portfolio founders to invest more in self-care — to personally reach-out for help if needed— because somehow our anxiety and obsessive need to keep a positive face in our game of impressions management just might lapse with a moment of clarity in personal judgement. That’s like asking a blind person to drive.
Those casual-cowboy fireside chat moments where old guard investors spout-off on conference stages about the virtues of self-care sacrifice and “oh no, this instance of that guy doing this college lifestyle hack, that 90hr week — those times were the best!”? Yeah, those moments of self unaware ego-affirmation among the highly influential, toxic-yet-vocal minority, aren’t helping, either.
I’m calling bullshit.
The casino is packed and founders are the chips VCs and accelerator partners are playing, with the hope they’ll each greet the sunrise with a more sizable stack than their peers, from the single-digit number of chips who’ll eventually succeed — +90% of all founder-chips thrown on the table, swept off before dawn as statistically bound to fail. Which is why volume-bet investment model has become so popular: throw a little at a lot, and statistically you can’t fail.
Birth Control Pills, Hockey, and Counseling
When I was taken under the wing of a prominent SV investor last year and encouraged to pursue a venture their firm provided me with pre-seed funding to support, I was over the moon. This super famous, totally successful person believed in me — and in my determination to make the world a better place through my startup-fu and vision in a problem space I‘m passionate about. Yeah!!
Partners from the firm also supported my effort as (incredible) advisors, and one in particular worked their butt off to ensure I got some level of funding to get me going. The end sum was extraordinarily modest — but it was funding. I had very, very little savings left at that point, am single (so no spouse w/ income to fall back on), and no family money available to tap. But these people believed in me, I sure as hell believed I could do it, and damn if I was going to anyone down or fail in my determination to get this much needed project going.
Win/Lose. Fail/Win. At that point, it’s all binary. Balance? Puffaw.
Going scrappy and jamming econo are by all means the name of the game in launching anything worthwhile. My dad was a startup guy in the 1970s & 1980s, and things were no different then — except most startup founders of the TRS-80 era were middle-aged, professionally experienced, and well connected by the time they entered that phase of their career. No, Steve and Bill weren’t, but they were famous exceptions to the norm.
At a mixer I attended a few weeks after I was awarded my funding, stories were abuzz of founders living in their cars — homeless to cut costs! At that point I’d already resigned to no hockey for the upcoming season. League fees were just short of a month’s rent, and despite the indisputable wellness benefits of playing beer-league hockey — it got me out of the house regularly, social w/ a group of non-technical goofballs, and more cardio than the most dedicated gym regimen could get me — it had to fall off as a priority. Sacrifice!
I had already let go of my truck. Zipcar & bicycling, baby! Getting a roommate for the extra room in my apartment was next on the list. Done! Cooking took the place of eating out, conferences could wait a year, and cocktails/drinking never being a big priority for me… those were ok to knock off the list, too. So: being single and living in the City, I pretty much stopped going out.
My $90/mo birth control pills were most important for me in easing my monthly cramps, but were also $90 because they’re a special non-formulary type with ultra-low Progesterone. No formulary option available. Biting the bullet — birth control & lady-parts pills had to go, too.
Paying-down credit cards had to also go. Start counting the interest accruals! Finally: my $130/session therapist. I couldn’t afford the up-front $130 each week in cash, while waiting for the $100 reimbursement check to come 3 weeks later. My renters insurance had to go, too.
Food, rent, health insurance premiums, prescription meds (my dad did pay for my anxiety meds, thankfully — the one tiny bit of support I was able to get from my retired and also financially struggling parent), PG&E, phone, and internet, were now the net of my allowable expenses. #stress
My ability to pare-down to that bare minimum was not a problem. I’m not a materialistic or extravagant kinda person, so there weren’t any hardship issues, there. It was kinda invigorating in a twisted way, actually! I also have no financial dependents, so that was a nice stroke of priveledge. As was my age: at 40 I’d already fought through the personal growing pains so vital to being a new-to-adulthood twenty-something, that somehow so many in the Venture community seem to forget still happen to us all—founder or not.
The stress endured from having chucked debt-reduction efforts, living hand to mouth, while also trying to launch the project of my life that I worked 24/7 on & with no cash runway to keep going beyond my 4-months of seed funding, still pushed me as close to the edge as I’d ever been. I don’t say that here to complain, at all. Rather: it’s long overdue for someone — anyone — to stand-up and say so. Plainly, and without apology.
If I were a single mother who’d left an abusive spouse, this would be heroic. If I were a longtime unemployed worker doing all I could to keep my home, it would have simply been life. I had millionaires on my side cheering me on to make my startup happen, though. It’s time to call that dynamic unethical. We’re humans with families and lives beyond whatever venture we’re pursuing this year/week/decade, not horses at a racetrack.
Real Care For Founders, Provided By Investors.
Employee Assistance Programs are in part an artifact of the pre-Obamacare world when health insurance didn’t cover therapy or substance abuse treatment. EAPs also just make a whole lot of sense for companies to provide as a benefit for their employees, as there’s no owner’s manual or resource center for surviving adulthood — and we all know it to be a fact that the more stable the person, the far more capable they are to excel at their work.
I’m calling here on the community of VCs and Accelerators to now innovate their own services, as an ethical obligation of stewardship to the founders their bets rest on. It’s time to develop, prioritize, invest in and and freely offer Founder Assistance Programs to the humans behind supported portfolio companies. Not an app or an app-based service, but a robust offering on par with the best of the best EAPs out there. Even creating 501(c)3 programs for not-yet/fledgling founders that can support us better than even the best mental health apps out there, would be a much needed artifact of stewardship.
But, wait — entrepreneurs are self-starters, self-sustainers… we don’t need silliness like that! But, wait — we so goddamned do. Especially those of us too young and focussed on our work to understand how frailly our livelihoods hang in the balance when things such as triggered mental health issues, life event crisis, personal legal challenges, and other human pedantry, interfere with our preferred priority of navigating foundership.
Founding a startup is perhaps one of the most stressful undertakings any of us will ever voluntarily take-on in our lifetimes. Investors who function as enablers of our entrepreneurial persuits; from where I sit and from what the research has demonstrated, investors thus also have an ethical obligation to step-up as stewards to the humans behind the ideas & executions they’ve vested their bets on succeeding.
Research has already proven that founders are prone by physiology to the innate traits that make us more prone to depression and anxiety, than the general population.
It needs to matter more than it does today, that founders succeed long-term as humans — and for the sake of our families and loved ones, stick around beyond spells of suicidal-grade despair.
I’m calling on all the Accelerator programs woo’ing young wide-eyed founders, on all seed-stage investment firms, and on the top VC firms powering today’s throttling surge of Tech startups, to do the right thing and setup programs to care for the founders they invest in, separately from the investments they make in the companies the founders create.
No, founders are not W2 employees of any accelerator or investment firm. Yes, that would be weird. But, guess what? VCs and Accelerator partners are multi-millionaires and billionaires. Would it kill any of them (or their altruistic dreams of world betterment through philanthropy, or their competitive dreams of launching more Disruption™ than their VC bedfellows) to put a few million aside to setup EAP type programs for the founders whose startups they support? Not senior-management of portfolio investments at the Series-A or beyond round, but the scruffy teams of 1–5 co-founders each startup has dedicated to it night and day, when participating in accelerator programs and seed or pre-seed stage funding.
I’m tired of hearing VCs honestly profess about having in earnest begged an accelerator batch or to an audience at a conference, that “oh, you need to prioritize self care!”
These are mostly kids. They have no money at all. They don’t have the life-prioritization skills that others their age may have who’ve lived through an acquisition phase; their hearts are on their sleeves, their best foot ALWAYS will have to be put forward when in your sight, no matter what you say.
They can’t wait for a proper benefits package to be assigned to them, either, even if you were to experiment with hiring them all as $1/yr W2 employees.
You — investors — innovate this. Now. EAPs, Health Funds, HSA grants to each founder in parallel to the startup’s award as well as access to confidential consults by an outside HR benefits-manager type resource… whatever it takes to put your founders in a safe-space where money isn’t an issue between founders getting the care they need, when/as they need it, without any venture partner or advisor involvement required with administrative anythings, so access can exist in parallel with the realities of the power dynamics at play.