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Key Findings

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Investors

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Purpose

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Policy

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Appendix

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Founder Challenges & Well-Being

We set out to understand how the journey of starting a company affects founders. Not just in terms of the company-building challenges, but also in exploring some of the intense personal challenges that founders must deal with on a daily basis. We started by asking what they consider to be the most challenging aspects of being a founder. Our respondents, more than 1,200 of them, most frequently cited balancing working and personal lives, loneliness at the top and securing access to talent and capital as their biggest challenges.

Since you started a company, what have you found the top three most challenging aspects of being a founder?

Source:
Note:
Founder respondents only. Numbers do not add to 100 as respondents selected up to three options.

Mental health isn’t a PR campaign, it’s a paradigm shift.

Mental health isn’t a PR campaign, it's a paradigm shift. Millennials and Generation Z are acutely aware of mental health issues, and it is something that we incorporate into our community events. It’s about making sure that entrepreneurs have a support system and have people to have honest conversations with. I'm interested to see in five to ten years how these conversations about mental health at the early stage will filter through to conversations about founders' relationships with investors, and what the expectations on the part of investors are.

Abby Scarborough

Yena

Co-Founder

The same challenges surfaced with similar frequency for both men and women founder respondents, though responses did demonstrate small differences around the challenge of securing access to capital, finding a reasonable balance in their personal and working lives, and finding mentors and advisors who actually add value.

Since you started a company, what have you found the top three most challenging aspects of being a founder?

Source:

Legend

  • Men
  • Women
Note:
Founder respondents only. Numbers do not add to 100 as respondents selected up to three options.

Where we saw a greater variance in responses was when we asked founders with different levels of experience. Repeat founders with significant experience in scaling a previous company are materially more likely to state that securing access to talent is the most challenging aspect of being a founder. They were also much less likely than first-time founders to cite the challenge of developing as a leader or being able to find mentors.

Since you started a company, what have you found the top three most challenging aspects of being a founder?

Source:

Legend

  • First-time founder
  • Repeat founder with limited experience in scaling company
  • Repeat founder with significant experience in scaling company
Note:
Founder respondents only. Numbers do not add to 100 as respondents selected up to three options.

Repeat founders


40%
of experienced repeat founders mentioned that 'securing access to talent' is one of the top three most challenging aspects.

Source:

The State Of European Tech Survey

It should not be a surprise that the most challenging aspects of being a founder also change at each step of the scaling journey. As their companies grow in scale, founders point out that the challenges of the earlier stages, such as securing access to capital and finding mentors, become much less of a concern. Instead, it becomes much clearer that finding a balance in their working and personal lives and developing as leaders of their growing companies become the most challenging aspects of being a founder.

Since you started a company, what have you found the top three most challenging aspects of being a founder?

Source:

Legend

  • <10 employees
  • 11-100 employees
  • >100 employees
Note:
Founder respondents only. Numbers do not add to 100 as respondents selected up to three options.

We asked founders if the experience of starting and building a company had led to any change in their mental health. While founders were most likely to say it had mostly had a positive impact on their mental health, we also found that one in five founders said it had a mostly negative impact for their mental health. It is interesting that 'success' - as defined here by scaling a company to a meaningful number of employees - is not more likely to lead to positive mental health outcomes. In fact, founders of larger companies were less likely to say they had experienced a positive change in their mental health.

Founders


19%
of all founders said that starting a company mostly had a negative impact on their well-being.

Have you experienced any change in your mental health since you founded your company?

Source:

Legend

  • <10 employees
  • 11-100 employees
  • >100 employees
Note:
Founder respondents only. Numbers may not to 100 due to rounding.

I am a co-founder so that has helped as [I have] done lone founder before, and it is tough so you have to team up with other founders/CEOs to support when getting going.

State of European Tech survey respondent

It is also noteworthy that we saw little difference between first-time and repeat founders. Experienced repeat founders were just as likely to say they had experienced a mostly negative change in their mental health as first-time founders. We did find that experienced repeat founders were more likely to say that they don't believe that being a founder had had any impact at all on their mental health.

Have you experienced any change in your mental health since you founded your company?

Source:

Legend

  • First-time founder
  • Repeat founder with limited experience
  • Repeat founder with significant previous experience
Note:
Founder respondents only. Numbers may not add to 100 due to rounding.

Where we did see a larger variance was between founders of externally funded and bootstrapped companies. Founders of bootstrapped companies were materially less likely to tell us that being a founder has had a mostly negative impact on their mental health compared with those founders who have raised external capital.

Have you experienced any change in your mental health since you founded your company?

Source:

Legend

  • Raised external capital
  • Bootstrapped
Note:
Founder respondents only. Numbers may not to 100 due to rounding.

I am under more stress than I've ever been, but I am also more intellectually stimulated than I've ever been. These positives and negatives are both felt at the same time, so they don't cancel out - but they are both felt.

State of European Tech survey respondent

We also saw that the decision to take external capital introduces a different set of challenges for those founders. While many challenges are cited at the same level by founders of both types of companies, such as the sense of loneliness at the top, there were clear differences of opinion on whether others were amongst the most challenging aspects of being a founder. Notably, founders of companies who have raised capital were more likely to see access to capital and talent as a challenge, while founders of bootstrapped companies were more likely to say that finding mentors was a challenge.

Since you started a company, what have you found the top three most challenging aspects of being a founder? By funded versus bootstrapped companies

Source:

Legend

  • Funded
  • Unfunded
Note:
Founder respondents only. Numbers may not add to 100 due to rounding.

We tried to explore the most challenging aspects of being a founder that were more or less likely to be correlated with founders who experience negative or positive impact on their mental health, and found some clear differences. Respondents who said that being a founder had had a mostly negative impact on their mental health were materially more likely to point to balance in the personal and working lives and loneliness at the top as being the most challenges issues.

Since you started a company, what have you found the top three most challenging aspects of being a founder?

Source:

Legend

  • Mostly negative impact
  • Mostly positive impact
Note:
Founder respondents only. Numbers do not add to 100 as respondents selected up to three options.

Due to the power dynamic between founders and investors, if the investor does not set the tone, founders may not feel that asking for help or voicing a need for support is possible.

Chronic stress and exhaustion are driven by an imbalance between an employees' perceived and actual resources, and their work and demands in the workplace. Stress and burnout, and then even more severe symptoms of negative mental health, are often signs of deeper root causes, which can range from personal time management practices to physical health, and relationships.

At an individual level, employees and founders need to be able and supported to manage the root causes that allow them to both perform and be well. At the company level, employees, founders, and investors need to be able to manage the need for growth in a smarter way and be able to have an honest conversation when growth expectations are not achievable because the market is simply not yet there.

In order to have open conversations, you need to have trust and open communication. Due to the power dynamic between founders and investors, if the investor does not set the tone, founders may not feel that asking for help or voicing a need for support is possible. Investors need to signal in many different ways that founders have permission to ask for help, get support, and talk about their overall mental/physical health and well-being.

Madeleine Evans

Levell

Founder & CEO

We also set out to explore what support, if any, founders are receiving from their investors to manage the pressures they experience. More than half of founder respondents who have raised external capital state they have received some level of support from their investors, with another 11% saying they had received significant support. But that leaves nearly 40% of founders who said they had received no support at all from their investors.

What support, if any, have you received from your investors to specifically help you manage the pressures of being a founder?

Source:
Note:
Founder respondents who have raised external capital only. Numbers may not to 100 due to rounding.

One investor/advisor in particular has been useful but mostly by being a role model. Or you see someone else acting in the right way (e.g. work-life balance, right morals). It is easy to keep those standards. Many words are just hot air.

State of European Tech survey respondent

Support from investors


38%
of founders who raised external capital said they had received no support at all from their investors to help them manage the pressures that comes with being a founder.

Source:

The State Of European Tech Survey

We also explored if founders who had experienced negative impact on their mental health were receiving support, and found that 41% of those founders had received no support at all from their investors.

What support, if any, have you received from your investors to specifically help you manage the pressures of being a founder?

Source:

Legend

  • Founders reporting mostly a positive impact on mental health
  • Founders reporting mostly a negative impact on mental health
Note:
Founder respondents who have raised external capital only. Numbers may not to 100 due to rounding.

When we asked founders if they would feel comfortable discussing changes in their mental health with their investors, we saw a clear divide amongst founders. Those who reported being negatively impacted are much more likely to feel uncomfortable discussing these changes with their investors - 41% in fact, compared to only 11% for founders for whom becoming a founder has been a positive experience.

Would you feel comfortable discussing changes in your mental health with your board investors?

Source:

Legend

  • Yes, I would feel comfortable
  • No, I would not feel comfortable
  • I don't think it is relevant
  • Not able to comment
  • Prefer not to say
  • Other
Note:
Founder respondents only. Numbers may not to 100 due to rounding.

Of course, it is a fair question to ask whether founders would actually appreciate any support from their investors. We found that the large majority, around two-thirds of founders, state they would indeed appreciate support from their investors to help manage their mental health. This is true whether their experience of being a founder has been mostly positive, neutral or negative (from the perspective of changes to their mental health).

Would you appreciate receiving support from your board/investors to specifically help you with managing your mental health?

Source:

Legend

  • Yes
  • No
  • Prefer not to say
  • Other
Note:
Founder respondents who have raised external capital only. Numbers may not to 100 due to rounding.

I think it would benefit the investments to be more open about things like [managing mental health], because you can course-correct [and] save the value of the investment. But good luck with that.

State of European Tech survey respondent

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