Investing in Mental Health

Building companies is hard. It requires a certain kind of individual who’s willing to manage high stress levels and massive amounts of work while maintaining the focus and drive to be successful. As such, start-up founders naturally seem to have the qualities needed to endure. But it is these same traits that can often be markers for issues in mental health ranging from bipolar disorder, to ADHD, anxiety, depression, and various other types of brain health.

Mental health is an important topic, not just in Venture Capital, of course. Recently, awareness for mental health has been growing, which is no surprise when you consider that, according to a new study from The National Council for Behavioral Health, more than half the American population is seeking help.

Despite the fact that so many Americans struggle with mental health — approximately 1 in 5 adults in the U.S., or 43.8 million people, experience mental illness in a given year — there seems to be a problem with actually getting help. From a high level (based on our limited research) this appears to be driven by three primary factors:

1. Limited Options: Believe it or not it is actually pretty hard to find a good therapist, and when you do, they are not always readily accessible. Ninety-six million Americans, or 38% of the population, have had to wait longer than one week for mental health treatments. And nearly half of Americans have personally had to or know someone who has had to drive more than an hour roundtrip to seek treatment.

2. Lack of Awareness: While most Americans do try to seek out treatment, there is also a large portion of the population (39%) who have wanted to but did not seek treatment for themselves or loved ones — in part due to not knowing where to go if they needed help.

3. Social Stigma: Nearly one-third of Americans have worried about others judging them after admitting to seeking mental health services, and over a fifth of the population have even lied to avoid telling people they were seeking mental health services. This stigma is particularly true for younger Americans, who are more likely to have worried about external judgement when they say they have sought mental health services (i.e. 49% Gen Z vs. 40% Millennials vs. 30% Gen X vs. 20% Boomers).

While national mental health statistics are troubling, they are particularly alarming for entrepreneurs. According to a study by Michael Freeman, 49% of entrepreneur respondents reported having a mental health condition as compared to 32% in the comparison group. Moreover, some specific conditions appear to be incredibly prevalent amongst founders. Based on Freeman’s study, founders/entrepreneurs are:

· 2X more likely to suffer from depression

· 6X more likely to suffer from ADHD

· 3X more likely to suffer from substance abuse

· 10X more likely to suffer from bi-polar disorder

So, this begs the question: what can we do as investors to improve this state of affairs?


My first kneejerk reaction was one of great idealism. The model is fundamentally flawed, was the first thought that came to mind. My thought process was simple. Statistically speaking ~65% of all start-ups ultimately fail. Fear of failure is likely the overwhelming contributor to stress related mental health issues. So, if the majority of founders are destined to fail, the current model is actually geared towards catalyzation and/or agitation of Mental Health issues in many ways. As an aside, I would also argue that the mentality of many VC’s to prioritize growth over sustainability also creates a related yet entirely different set of issues ranging from misaligned expectations, to misaligned incentives.

But in reality, the model isn’t going to change anytime soon. So long as there is a lot of money to be made and a lot of innovation to be driven by investing in start-ups there will always be people chasing that opportunity. BTW if funds raised is any indication, then the market is only growing: According to Prequin and First Republic, a record 239 micro-venture funds closed in 2018, securing an all-time high of $7.2 billion, four times the amount raised in 2009.

Therefore, if the ecosystem isn’t going to change, we must do our best to operate within the current model. Knowing that the current model has a potential to foster unhealthy mental health practices, perhaps we should direct our efforts as follows.

Create Awareness: First, we need to start by acknowledging the issue. If there is lack of awareness, then we need to help bring awareness to the issue — and that in and of itself is a good place to start. In other words, if we want to address the problem, we first must acknowledge that there is a real problem.

Provide More Options: Second, we need to embrace the situation and be honest with the fact that this is a real concern and one that cannot be ignored. We need to make sure that we are honest about providing the right resources and support systems for our entrepreneurs, and we need to be honest about prioritizing mental health over business performance. And for the avoidance of doubt, I do not believe the two are mutually exclusive. Actually, we would argue that the contrary is true: the better the state of a founder’s mental health the more likely they are to succeed.

Eliminate the Stigma: Lastly, and perhaps most importantly, we need to work to eliminate the negative stigma associated with mental health. We can do this in part by supporting the aforementioned points, i.e. bringing greater awareness to the issue and providing more readily accessible treatment options. But ultimately the onus is on us to work closely with our founders and connect with them on a level where we can (within reason) make sure that they are not pushing themselves too hard, make sure they are getting enough sleep, eating properly, getting exercise…and everything else that we know to be essential in maintaining positive mental health. Moreover, we must be aware and honest in terms of monitoring founders’ health. Should they require resources we need to be ready to support them accordingly.


In an effort to help drive awareness, we plan to begin our efforts with an “Investor Pledge for Mental Health.” This pledge is led by Kip, a company that makes therapy more efficient by combining in-person visits with digital support in-between. Through our pledge, we will be able to support resources for our founders by sponsoring initial therapy sessions, if they choose to participate. Further to eliminating stigma, founders can choose to participate anonymously. As we grow and evolve as an organization, we will continue to expand mental health resources for our founders. Simply put, we believe this is not only a moral obligation but one that is also directly aligned with value creation; healthy founders make for healthy companies.