Under Pressure: Why Founders should Not Ignore Burnout Signs

“There’s a stereotype that startup CEOs are twenty-three-year-olds who can live on nothing while they're building their companies, but that’s really not the case,” says Suranga Chandratillake, a General Partner at VC firm, Balderton Capital.

According to new research published by Balderton as part of its Founder Wellbeing and Performance Program, most U.K. startup CEOs are in their forties. Rather than being footloose and fancy-free, they have mortgages to pay and family responsibilities. “Ninety percent are married or in long-term relationships, and fifty percent are parents or carers,” adds Chandratillake.

And that has implications, not only for the personal wellbeing of the founder community but also for the performance of the companies they run. Let's look at money. A founder fresh out of university can probably put up with the privations of startup life. After all, for most of us, the university experience is all about having a good and productive time while eking out limited financial resources. Start a company in your early twenties and it isn’t too much of a stretch to carry over that lifestyle into working life. Yes, there isn’t a lot of money around but there is the prospect of a golden entrepreneurial future built on the foundations of a few years of relative hardship. It’s a long game.

It’s very different for those who found companies later in life. Spend a few years in a salaried career and a lot of stuff happens. Relationships form, children arrive and suddenly it costs a lot more money just to get by. Consequently, older entrepreneurs can find themselves facing financial pressures that wouldn’t be quite so worrisome to their younger counterparts.

Underpaid Founders

Balderton Capital's research suggests that a hefty 60 percent of seed-stage founders don’t pay themselves enough. Not surprisingly, this can take a considerable toll on family life, adding to the tensions and stresses that ultimately result in burnout. Indeed, 70% of founders say burnout is an issue within the ecosystem.

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And it’s not all about money. The demands of entrepreneurial life make it much harder to strike a balance between work, family, friends and personal activities. Trying to juggle all these aspects within a limited amount of time is another factor that can result in premature burnout.

So what can be done about this? Well, let’s start with salary. As Chandratillake observes, there are good reasons why a founder might opt to take a lower-than-optimal salary - or in some cases, no payment at all. Even with a Seed or Series A funding round secured, hiring skilled and experienced staff and developing new products is a costly business. Thus, founders may choose to prioritize the salaries of others, rather than their own.

This may be a perfectly viable course of action. “Some people are in the fortunate position of having already been financially successful so they can take that kind of risk,” says Chandratillake. “They may have the kind of resources that allow them to do it for as long as they need to. Or they have a plan that says they will take reduced pay for X years and then stop if not successful."

Others, however, put themselves under a degree of stress and hope that things will get better in the future. In these cases, the strains may be ultimately relaxed when money from a later round, such as Series C, allows a higher salary. Or founders might sell shares from their own allocation to free up cash.

Chandratillake says one way to help founders is to encourage them to sell secondaries. “Sometimes founders can be embarrassed to ask - they feel that if they ask, they are not dedicated to the cause. The opposite is true.”

Honest Conversations

Chandratillake says there is also a need for honest conversations about financial pressures. “One of the things we do is ask questions about how much people are paying themselves and whether it is actually sustainable for them. Most people will pay themselves a little bit less, but if it is so little that you can’t make ends meet it is not good. It causes a distraction.”

But those honest conversations may need to go further. In addition to financial worries, the survey also shows that many founders struggle to adapt their leadership styles as the business grows. All this ultimately feeds into the performance of the business itself. Then of course - as touched on earlier - the sheer amount of time spent in the office means that other aspects of life fall by the wayside. We might be talking about personal care, diet, sleep, general health or relationships.

Balderton Capital is trying to tie these threads together through a program that offers a mix of physical and mental health advice and business coaching. In addition, the VC facilitates peer-to-peer connections between CEOs, providing a means for founders to talk to each other about problems and issues.

Putting Yourself First

Doctor Tim Guilliams is co-founder - along with Doctor David Brown - of HealX, an AI-driven drug discovery startup with a focus on rare diseases. The company has just raised $47 million in Series C funding but as Dr Guilliams explains, the journey so far has had its fair share of challenges.

“Inventing new medicine is a hard problem to crack because human biology is so complicated but that’s really where AI can do something good for the world,” he says. “On the personal journey, so many things can change - the markets, the dynamics, personal circumstances. The most important thing for any human being - and also founders - is really figuring out your own personal resilience. I learned this the hard way.”

Dr Guilliams recalls that in 2022, he was completely burned out due a combination of things happening at work and at home. “It was a perfect storm,” he says.

The Balderton program helped him understand what he describes as his personal model for wellbeing, energy and resilience. Or to put it another way, it helped him avoid a pattern he characterizes as fly, crash, fly, crash. “I worked out a way of being able to continue to fly at 85% energy no matter what happens.”

There was a psychological hurdle to jump. The first step, he says, was giving himself permission to his own needs first. Initially, he thought had no time for the program. It was Balderton who pressed him to participate. “So there was a mental shift first," he says.

The next step was to dissect aspects of life such as sleep, nutrition,sports activities, glucose levels. This was done by people at the Wellfounded clinic who looked at these factors in a holistic way. “They looked at everything in a data-driven way to figure out what would work for me.”

A degree of commitment to the program was required, not least in accepting that third parties would look at physical and psychological metrics. I asked Dr Guilliams if this was comfortable. He stresses that Balderton set up the program but they don’t look at the data. That was essential in building trust. Similarly, the peer-to-peer CEO program allowed founders to talk to each other without the VC being part of the conversation.

Ultimately, Dr Guilliams says that as circumstances change and new external pressures emerge, it’s important for entrepreneurs to have a “toolbox” that will help them to adapt. Meanwhile, from the investor's point of view, VCs want their founders to be in place and perform well. Resilience is part of the equation.

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