Imagine you’re an entrepreneur and you wake up with a sinking feeling and your gut tightens as you head to the co-working facility where you work on your start-up. You’re feeling stressed over hiring a product manager and meeting quarterly benchmarks. On top of that, you have personal stress, perhaps with your partner, because of all the long hours you’re putting into the fledgling business.
You might trust a board member to confide in. But traditional start-up culture dictates you don’t feel comfortable detailing to your investors your emotional well-being. Investors write checks, make connections, provide marketing support and help you recruit. They may even help you with executive coaching to improve working relations with your growing team.
Mental health services are not often a part of a venture firm’s portfolio services.
That notion, however, is dated. The table stakes have been raised when it comes to portfolio services offered by venture firms as more VCs are offering mental health and counseling services to their portfolio founders and executives.
Kari Sulenes, a partner at San Francisco-based Alpha Bridge Ventures, says there’s a shift happening in the venture community.
“I believe investors are seeing the overall health of founders and the health of their start-ups as intertwined,” says Sulenes, who is also executive director of Atlas, Alpha Bridge’s affiliated leadership platform dedicated to what it calls “holistic founder support.” Atlas works with founders and others to enhance their mental, emotional and physical health alongside leadership growth.
Healthy founders, healthy start-ups
Alpha Bridge, which makes post-seed investments to help bridge start-ups to Series A level, launched Atlas initially in-house in 2018 to help founders stay healthy and avoid burnout. Alpha Bridge co-founder and Managing Partner Howie Diamond says the firm was the first to offer mental health supports services as a value-add. Since then, several other firms now work with Atlas, which is operated separately from Alpha Bridge, to obtain health services for their portfolio company founders.
Atlas won’t disclose firm names, but dozens of founders have now used the program’s services.
Sulenes, who has degrees in clinical psychology and organizational behavior, says she believes that as more firms express an interest in entrepreneurs’ mental and physical health providing such services will help get them into deals.
That could explain why Sulenes says she’s been fielding calls from other firms looking for solutions to support their portfolio companies. As a result of the in-bound interest, she held an invite-only webinar in January to answer questions and discuss the value of providing mental health services. She says she invited 40 to the webinar and is looking to host another event in the summer with 50 guests.
Builders and Freestyle roll out services
The notion of mental services is apparently catching on. In January alone, two venture firms formalized or announced their efforts to help their entrepreneurs deal with stress or mental health issues: Builders VC and Freestyle Capital.
In early January, the Series A investor Builders VC launched B2, a startup studio to provide various services to help entrepreneurs thrive. This includes data analytics, performance marketing and customer acquisition, as well as founder support. The firm employs Johnny LaLonde, a PhD mental health coach on staff to help entrepreneurs find balance, manage stress and have a forum to discuss issues.
“Money is money and you can get that anywhere, but entrepreneurs need help building their company and that includes counseling support,” says Jim Kim, founder and general partner of Builders VC.
Kim says LaLonde has worked with Builders VC for more than a year, but the firm formalized the structure since founders are increasingly being scrutinized by both private and public markets, leading to increased anxiety and pressure. “It’s a different world we live in now, so we have to ask ourselves what we as investors can do to provide entrepreneurs with the resources to help them,” Kim says. “In addition to advice on PR and HR, this now includes counseling.”
Kim says their entire portfolio is aware of the services and at least half is engaged with B2, including a CEO who had a family crisis and reached out to LaLonde and Kim for assistance.
Separately, in late January, Josh Felser, co-founder of early-stage investor Freestyle Capital, announced the firm will offer mental health services to its portfolio companies.
In a Medium blog post, Felser said that during his days as a founder, he would probably have been fired or at the very least encouraged ostensibly to take time off if he disclosed to his investors his mental state.
Freestyle’s services include using Meru Health, a three-month digital program for treating depression, anxiety and burnout with remote therapists and psychiatrists; and the Hoffman Institute, which provides a one-week intensive on-site program, leveraging therapy, meditation and other resources.
“We, at Freestyle, are all serial founders and have all experienced differing types of mental health issues in our careers,” Felser wrote. “We hope our initiative not only helps Freestyle founders but encourages other VCs and companies to take tangible steps to provide their portfolio founders and employees with the help they need and deserve.”
Brad Feld, a partner at Foundry Group and an LP in Freestyle, has similarly blogged about mental health issues for founders and investors alike.
He noted that last year Felicis Ventures gifted its founders 1 percent of every invested dollar by the firm to spend on coaching and mental health.
“I’m extremely excited to see [Freestyle’s] leadership in this area,” Feld writes. “While they are not the first firm to announce an initiative like this, I’m hopeful that this is momentum in an area that needs a lot more attention, support and help.”
Value-add is taking hold
To be clear, many venture firms in recent years operate platforms that help portfolio companies and their entrepreneurs in a variety of new ways to differentiate themselves from other investors. This includes executive recruiting, PR and marketing, business development and market analysis, geographic expansion and community building, among other services.
One such firm is Andreessen Horowitz, which is known for employing dozens of people on staff to support their portfolio companies. An LP in AH tells Venture Capital Journal that he likes the model. “Value add is a good thing,” the LP says. “Great idea to offer these services.”
Some firms also help with executive coaching. MergeLane of Boulder, Colorado, invests as a GP and also as an LP in women-led funds, employs a coach-in-residence on staff.
Similarly, Sarah Hodges is a partner at Pillar VC in Boston, investing in enterprise SaaS and consumer deals. She also manages the firm’s platform that touches on founder wellness.
Last year, Pillar launched a program to provide a $5,000 CEO Coach & Wellness stipend to its founders, which can be applied toward working with a coach or towards therapy. In September, Pillar also hosted a retreat in Vermont with 100 people who gathered for two days to discuss mental health and wellness.
“Leading a company in the CEO seat can be a lonely journey, and we’re big advocates for founders surrounding themselves with a community of support,” Hodges says.
A representative at a large venture firm in the San Francisco Bay Area says the firm offers coaching services which at times addresses the mental health of the founders. But the firm does not yet offer specific mental health services. The portfolio rep says the firm may one day focus on mental health as part of its executive coaching if more portfolio companies asked for it.
“The services are on point as everyone is stressed out,” the source said.
Kim of Builders VC says more firms are learning it’s all about providing the entrepreneur with resources to help them and their business.
“Entrepreneurs like it and so do LPs cause it’s a differentiation,” he says. “And now we’re getting requests from our LPs to share our staff and have Johnny [LaLonde] visit with them. That’s a great vindication.”