David Mott, Founder Partner, Oxford Capital reflects on the reasons why he believes that now, more than ever, the discussion around mental health needs to be open and transparent especially amongst the entrepreneurial community
We’re aware that the entrepreneurial path is rarely a smooth one, even the most successful founders and business owners will face challenges along the way and the pandemic has heightened many of these issues. Cut off from their teams, rapidly creating a new digital-first culture and worries about funding – these are just some of the challenges that founders have had to confront.
As early-stage investors, years of experience has taught us that our founders will need guidance to cope with both the good and bad of building a business. But rather than just focus on the potential issues and roadblocks, we’re really passionate about normalising the conversation around mental health and supporting our founders through all stages of growing their companies.
We also think these are issues that are likely to resonate with the adviser community – many of whom run their own small businesses or operate in small teams and have had to adapt over the last year as the environment has evolved.
The Mindful VC – the importance of providing mental health support
From experience, we know how important it is for founders to be resilient and able to perform when they are required to endure long periods of hard work, higher levels of stress and anxiety. Recent research conducted by 3sixty on founder stress and performance found that 53% believe building a business was one of the toughest times of their lives and 45% were under constant and extreme pressure. Overall, 1 in 4 founders are suffering in silence with their mental health.
We believe it is unambiguously in our interest to take the mental health of founders seriously because failure to do so can be hugely detrimental to the growth of a business (and the well-being of the founder and their teams).
Founders that stay in their businesses for the long term will typically generate better outcomes for all stakeholders compared with companies that hire in external CEOs. Of course, there are exceptions, but in our experience, losing a founder often has a negative impact on shareholder value. A company can lose some of its passion, sense of purpose and drive when a founder leaves. We believe that the best founders have the right growth mindset to develop themselves into leaders for the next phase of their business journey. And that they can attract the right quality of people around them to fill any gaps in skill or experience.
Practical steps to provide support and guidance
But how practically can we provide support? We start by having regular check-ins with the founder, simply asking ‘how are you’ and not just taking ‘fine’ for an answer. We encourage founders to join peer to peer networks, seek mentors or professional coaching. We also strongly encourage the appointment of a chair or independent director on the boards and these can often play an important role in mentoring and supporting the CEO.
Within our own portfolio, we frequently have to deal with life events, both positive (marriage and kids) and negative (illness, bereavement, divorce, shock). We think of this as a form of crisis management. What contingencies need to be in place? How will we build support and organisational resilience? Having a written plan can make the difference. We need to be mindful that founders have a vision and that running out of cash can wreck this dream – this risk can be a major cause of stress. As VCs, we plan follow-on funding decisions further in advance to help companies maintain a solid cash buffer. We can also help to put things into perspective for founders, events are rarely as catastrophic as they initially feel and others have usually faced similar issues. By sharing challenges openly, issues can often be resolved quicker.
Taking a step back to build perspective
But perhaps the most important thing to consider and this is something all business owners could take on board – is the need to take time for themselves. To gain some perspective, everyone needs to take a break and disconnect from their work lives. Whether it’s taking some exercise, spending time with friends and family, or simply getting enough sleep, this will all contribute to positive mental health.
A book really resonated with me recently by CEO and Founder Naz Beheshti – Pause. Breathe. Choose.: Become the CEO of Your Well-Being. It highlights the importance of balancing personal and work life, of breathing to improve rationale decision making and gain clarity. Most importantly achieving your career goals isn’t worth sacrificing your well-being.
We know from experience that supporting founders means we can help them sustain levels of peak performance to get the best out of them and their business. Now, more than ever the discussion around mental health needs to be open and transparent.