Founder Burnout: Why a London VC takes care of his entrepreneurs

In addition to providing capital, should venture capitalists provide some degree of pastoral care to their portfolio founders?

Well, even when evaluated in purely business terms, the answer to that question might just be yes. It can take many years to steer a start-up business to the point where an exit can be achieved and during that time a lot can go wrong. The entrepreneur may lose focus, burn out, or simply find they no longer have the heart or the will to give 100% to the job at hand. So if a VC wants to see a return on their investment, it makes sense to look after geese that have the potential to lay golden eggs.

And according to a report released last week by Balderton Capital - a London-based VC that invests in early-stage and growth-stage European companies - there is evidence that at least some founders are struggling to cope with the pressures and the challenges of growing their businesses in an increasingly competitive environment. Coinciding with the research findings, Balderton has launched its own "Wellness and Performance" platform designed to provide help and support to its cohort of portfolio entrepreneurs.

I spoke to Suranga Chandratillake, a general partner at Balderton to find out more.

The work/success equation

It should come as no surprise that the founders of venture capital-backed companies tend to be driven individuals who work long hours. In fact, 90% of people who took part in the Balderton study agreed that they push themselves to work harder and longer. A slightly smaller subset - 84%, to be precise - said entrepreneurs had to work hard to be successful.

Where do these expectations come from? Sometimes from investors, it seems. Just over half of survey respondents said investors and board members put pressure on them to be constantly available.

Diminishing Returns and Bad Decisions

This is where things start to get tricky. People starting their own businesses aren't usually afraid of hard work, and a culture of long hours can become something of an indicator of commitment. But spending too much time in the office can be at worst counterproductive and at best a bit pointless.

More than four-fifths of entrepreneurs surveyed said there were diminishing returns to "just putting in more hours." And if you step back to examine not just the work culture, but also the stresses and anxieties associated with running a business, there's a real danger that performance will suffer. Entrepreneurs are very aware that burnout, anxiety, and depression are companions to poor decision-making.

So how do you strike the right balance between working hard and pushing yourself to the point where things start to fall apart? And if you're one of those people who knowingly stays in the office too late for no good reason but keeps doing it anyway, how do you change that behavior?

According to Chandratillake, investors can play a role in supporting founders during difficult and stressful times, but this is often done informally. "For many years, as a company, we've helped founders and CEOs through the challenges they face," he says. In practical terms, this could simply mean having a conversation that addresses a particular issue.

The company's Well-being and Performance platform has implemented something more structured. As Chandratillake explains, the initiative aims to provide help in three areas: health and wellness, coaching, and peer-to-peer conversations. But what does this look like in practice?

"We have a physical program run by medical experts," says Chandratillake. "They will give you tests and make recommendations, for example on diet, exercise or sleep."

Along with this, Balderton has hired an executive coach who will provide a program of meetings to discuss management and decision-making issues with individual founders.

And finally, Balderton arranged for startup executives to meet in groups of five to seven. “We organized it to bring together CEOs living in the same cities. It's a program where founders of non-competitive businesses can connect and discuss common issues."

As Chandratillake acknowledges, the initiative is only open...