Protecting and enhancing startup founder wellbeing

This article is part of the ‘Inspiring Transformations’ series promoted by Esade Entrepreneur Institute for its 30th anniversary. 

Entrepreneurship is one of the most rewarding and fulfilling career paths, but it also comes with unique and significant stressors. The startup journey is often likened to a rollercoaster ride due to its exhilarating highs and daunting lows. While the benefits of entrepreneurship – including meaningful work, innovation, and economic growth – are widely recognized, the potential adverse impact on founders and their psychological wellbeing remains largely overlooked.  

In a recent OECD report, occupational health experts described entrepreneurs' working conditions as "characterized by long working hours and the potential for stress and health-related issues." The demands of running a business – such as high uncertainty and high workload – can easily surpass the resources available to founders, jeopardizing their wellbeing.  

A study conducted by researchers from Stanford and UC Berkeley unveiled a sobering reality: 72% of the entrepreneurs in the sample reported mental health concerns, a significantly higher proportion compared to the control group at 49%. Founders, on average, suffer more from suicidal thoughts & depression (2x), addiction (3x), and bipolar disorder (10x).  

72% of entrepreneurs report having mental health concerns

Furthermore, a report on the wellbeing of UK entrepreneurs revealed that 77% of respondents experienced loneliness during their startup journeys. Such loneliness poses severe risks to one's physical and mental health, potentially leading to conditions such as high blood pressure, cardiovascular disease, dementia, anxiety, and burnout.  

Perhaps most strikingly, the State of European Tech report exposed a disconcerting facet of the entrepreneurial ecosystem: two in five founders who secured external capital received no support from investors in managing the pressures of venture creation. This lack of support is concerning, especially when considering that repeat founders are equally susceptible to a negative impact on their mental health as first-time founders, as evidenced by the study.  

A cornerstone for success 

Founders must understand that caring for their wellbeing is not a detractor from startup success but a cornerstone of it. Healthy founders fuel healthy workplaces, nurturing the wellbeing of employees, which, in turn, will lead to healthy businesses. Recent studies have highlighted the "recovery paradox" experienced by entrepreneurs; the more they need recovery from work-related stressors, the more they struggle to achieve it.  

It is crucial for individuals to proactively identify recovery interventions that work best for them personally. The three categories of recovery are:  

• Respite involves interrupting work for tangible and/or mental relief. Examples include taking microbreaks, spending time in nature, socializing, listening to music, or practising mindfulness.  
• Reappraisal refers to changing one's perception of stressors, for instance, with cognitive behavioural therapy, stress optimization techniques, or positive reflections.  
• Regimen implies establishing a structured routine, for example, through sleep hygiene, regular exercise, or a balanced and nutritious diet.  

Yet, empowering entrepreneurs to protect and enhance their wellbeing is a collective responsibility! The broader ecosystem, encompassing investors, accelerators, and educational institutions, holds the key to prioritizing and destigmatizing mental healthcare for founders.  

Initiatives like the Founder Mental Health Pledge, Founders TabooBalderton Capital's Founder Wellbeing Programme, or Esade's new MBA course on Founder Wellbeing exemplify initial strides. Together, by championing these efforts and launching similar initiatives, we can transform the entrepreneurial landscape into one where founders thrive, employees flourish, and businesses prosper. 

Refferences and recommended readings

• Atomico (2019). The State or European Tech Report.
• Freeman, M. A., Staudenmaier, P. J., Zisser, M. R., & Andresen, L. A. (2019). The prevalence and co-occurrence of psychiatric conditions among entrepreneurs and their families. Small Business Economics, 53, 323-342.
• OECD. (2019). The Missing Entrepreneurs: Policies for Inclusive Entrepreneurship.
• Stephan, U. (2018). Entrepreneurs’ Mental Health and Well-being: A Review and Research Agenda. Academy of Management Perspectives, 32(3), 290-322.
• Stephan, U., Rauch, A., & Hatak, I. (2023). Happy Entrepreneurs? Everywhere? A Meta-Analysis of Entrepreneurship and Wellbeing. Entrepreneurship Theory and Practice, 47(2), 553-593.
• Weare3Sixty (2019). The Entrepreneur Pressure and Wellbeing Study.
• Williamson, A. J., Gish, J. J., & Stephan, U. (2021). Let’s Focus on Solutions to Entrepreneurial Ill-being! Recovery Interventions to Enhance Entrepreneurial Well-being. Entrepreneurship Theory & Practice, 45(6), 1307-1338.