Let’s talk about you- not your company. How are you?
The Ananda Founders’ Health Programme.
In this article by Ananda Impact Ventures Partner, Bernd Klosterkemper, we reflect on our approach to founders’ health and our journey to make building a company a better and more enjoyable experience for all.
During my time as the CEO of PlanetHome, I had firsthand experience of growing and running a fast-paced company, managing investor expectations, and leading a team. Despite having an amazingly strong, diverse leadership team and the support of wonderful and highly experienced colleagues there were many moments when the pressure felt like it was on my shoulders alone — even if it wasn’t.
A couple of years later, early in my VC career, two of the founders I had the opportunity to work with were having serious troubles with their mental and physical health. Watching these highly talented people struggling because of mounting business pressures was one of the darkest experiences of my investor career. The sad truth is that these two founders are obviously not alone in experiencing this enormous pressure — there are countless others also struggling with their mental and physical health.
“There were definitely times where I was deeply depressed. I would go to bed with a rock in my chest.” — Sophia Amoruso, founder of Nasty Gal
Four years ago, when we made the decision at Ananda Impact Ventures to take action on founders’ mental health, we were already late. The inevitable pressures of setting up and growing a business often lead to mental — and at times physical — strain. Yet, our entire VC industry struggles to openly address this issue. It took the recent Silicon Valley Bank (SVB) turmoil — which led to a new initiative in the US called the “Founder Mental Health Pledge” — to raise broader awareness of the topic and for a few more funds to discuss this topic openly.
For us at Ananda it also took many years from the start of our fund before we came to the realisation that we needed to do something. For one thing: we are investors and the incredible skill of founders is what leads to business success. Our founders are remarkable people who have embarked on a journey to build the most successful startups with clear, measurable impacts for our society or nature. They are the ones who build innovative companies and lead them successfully through ups and downs — something that requires significant mental and physical strength. Treating this skill with the required support is the most financially sound thing you could do as an investor. And at least equally as important: we claim to be partners of the founding team, trusted supporters and responsible shareholders (even more so in our case as impact investors) and we need to live up to this standard.
And from both my entrepreneurial and VC experience I have taken away two things. Firstly, we as VC investors are inherently part of the system that is creating those well-being risks for founders, and this will always be the case to a certain degree. But secondly, as a result, we can contribute to the solution too.
Our impact as VCs on founders’ health
We give founders enormous sums of money and expect superhuman performance in return. When you add in the fact that many founders have also borrowed early money from friends and family, you can see how much emotional pressure is on them to not let people down.
I believe that we, and the investors we co-invest with, do our utmost to act responsibly and support our founders, especially when it comes to difficult times. And certainly our personal behaviour as investors can make a huge difference to how the founder feels. But on the other hand, let’s face it: even if we were the nicest, most empathetic people who were reachable 24/7, in the end, being an investor limits our ability to be the founder’s trusted go-to person when it comes to very personal health issues.
Imagine if as a founder you had six months of runway left and discussions around commitments for the urgently needed financing round were ongoing. And then the stress became too much and you realised that you were struggling with burnout or that conflicts were arising between you and your co-founder… What would you do? Would the first person you speak to be your investor? Probably not. You would likely be focused on doing everything possible to close the fundraising round and keep your company running.
Investors and founders, while aligned in many ways, also have different objectives and challenges. And though we cannot get rid of all of those conflicts or interests, we have to acknowledge them even more so when we are talking about founders’ well-being.
The Ananda Founders’ Health Programme
To this day the actions that were triggered by those experiences and reflections are part of Ananda’s due diligence and investment process.
First, we started to involve experienced HR professionals before the investment stage. These HR experts talk to each founder individually to find out what resources they do or don’t have and what support they might benefit from, as an individual and as a founding team. The corresponding output: a personalised HR roadmap that is an essential starting point for our relationship with founders. Secondly, based on this initial step, we make sure we allocate a company budget to grow the founder personally and professionally, a requirement we put into all of our term sheets.
And lastly, we have been — and will be — working on ourselves. It says a lot that founders typically answer our question “how are you doing?” by telling us how their company is doing. And when we insist and make it clear that we really want to know how they are doing, their answer is quite often that no VC has ever asked them this question before. Don’t get me wrong, it’s not only about asking how they are doing, and there is a fine line in how “deep” we can go here, but it’s also about how we deal with our founders when things go wrong or when expectations are not met, or how we manage conversations when we have different views on where we should go and how fast.
The interaction with our founders is an area that we need to work on every day; and there is certainly room for improvement — for me, us as investors at Ananda, and our entire industry. Acknowledging this and also valuing our own well-being as a team, we have been working with a coach ourselves, from partner level to entire team setups and encouraging individual coaching beyond those sessions.
On a journey
All these actions led us to a more structured version of our founder’s wellbeing efforts: a programme to proactively support founders’ health, resilience and personal mental skill set. From individual coaching, to peer support, curated workshops and anonymous feedback on us as an investment team. Covering topics from physical to mental health, but also other areas that might be particularly important for us to offer that are especially sensitive in nature where founders can profit from additional support beyond the investment team, such as financial and family health.
Our goal: to own our share of the responsibility, create structures that allow us to work on ourselves, and provide our founders with the resources needed to grow their business and impact aligned with both their potential and well-being.
And while yes, we are at the final stages of kicking off this second version of our programme, we once again have to acknowledge something: this is still the beginning and there might never be an end to this journey. We will always be both part of the problem and the solution. Hopefully with each stop on our journey will be far more the latter than we are the former.
Bernd Klosterkemper is Partner at Ananda Impact Ventures
