Masawa Minute 108

Founder mental health crisis looming with 85% experiencing high stress | + More! 🐠

This is the Masawa Minute — mental wellness, social impact, and impact investing snippets from what we’ve read and created in the last month + where you can get active.

This week, we delve into the pressing issues surrounding founder mental health and workplace wellness, highlighting challenges and innovative solutions that are shaping a more supportive ecosystem for entrepreneurs and employees alike. Enjoy!

Masawa Update

In just two weeks (March 25–27), we’re heading to Paris for the ChangeNOW conference, where Sabine will be moderating a series of panels on alternative financing and governance structures. We’re excited about the opportunity to continue driving meaningful change, contribute to the funding ecosystem, and discuss the transformative work we’re doing with some of the coolest people around. If you’re in the area, we’d love to chat — shoot us a message or come say hi!

This Week’s Story

The hidden human cost behind startup success

A recent survey by Sifted of 156 founders has unveiled a concerning landscape in the startup world. The past year has been particularly tough, marked by decreased valuations, investor caution, widespread layoffs, and an unprecedented focus on profitability. This has taken a significant toll on founders’ wellbeing, with 45% rating their mental health as ‘bad’ or ‘very bad ‘, 85% experiencing high stress, and 75% dealing with anxiety. A striking 61% have contemplated leaving their ventures, and 49% are considering doing so within the next year, citing unsustainable work rhythms, personal life sacrifices, and a daunting fundraising environment as key reasons.

Most respondents lead early-stage companies, struggling primarily with fundraising, achieving work-life balance, and reaching profitability. The lack of work-life balance specifically has led to reduced exercise, unhealthy eating habits, and diminished time with loved ones, exacerbating feelings of anxiety, depression, and burnout. Despite these challenges, only a minority of founders feel comfortable discussing their mental health struggles, mostly turning to partners, friends, and therapists for support. Meanwhile, over half report receiving no mental health support from their investors whatsoever, adding to the sense of isolation.

Conflicts with co-founders and difficulties in aligning values and visions have pushed dozens of founders toward reconsidering their professional paths. These findings present definitive proof yet again that a paradigm shift within the VC world is critically needed. This is the impetus and intention of Masawa’s Nurture Capital approach, designed to meet the specific needs of founders, enabling them to enhance their wellbeing, leadership skills, and team resilience. However, it’s encouraging to see other initiatives like Balderton Capital’s Founder Wellbeing Program, Ananda Impact Ventures’ resilience training and Cherry Ventures’ newly launched Copilot Program making strides towards a more supportive and inclusive entrepreneurial ecosystem.

49% of founders say they’re considering quitting their startup this year

What else we’re reading…

💸 This year’s ImpactAssets 50 list reveals a significant trend towards impact-linked compensation for impact fund managers, as well as outstanding financial returns. With 23% incorporating social and environmental outcomes into their pay and all the managers on the list meeting or surpassing their financial targets, this reflects a promising future for the impact finance sector. By the way, Masawa took part in the Impact Linked Compensation Report project last year — if you haven’t seen it yet, check it out!

🍸 With many workers still facing constant pressure to maximize productivity at all times, the idea of reducing the amount of work in order to get more done might seem counterintuitive. However, that’s exactly what needs to happen to foster creativity and strategic thinking, which are essential for long-term success and innovation in any organization.

🧘 Pure Ventures in the US is yet another VC recognizing the stressful and challenging nature of fundraising and the importance of providing founders with mental, emotional and physical health support. It does so by offering Pilea, a platform out of Atlas Bridge VC, designed to connect startup founders with essential wellness and personal development services.

🔥 VCs predict a severe mental health crisis among startup founders this year, exacerbated by financial pressures and a funding shortfall. The stress of navigating a tech downturn, compounded by feelings of isolation, places founders at high risk. Consequently, shifting more of the responsibility for supporting founders’ wellbeing to investors is critical for the sustainability of the ecosystem.

📣 Many employees regularly experience stress, and in those tense times, the chances of miscommunication are high. To prevent added anxiety in uncertain periods, leaders must carefully consider their communication approach with teams: here are five common mistakes made by even the most well-meaning leaders and how to avoid them.

Gabija Vilkaitė