“Stronger than Yesterday” - Mental Health and Founder Mentalities:

I have a future Ashlee Simpson focused newsletter coming - but I’ll start with Britney…

I don’t have a lot of quiet moments in my own head – there’s always an idea, something to do, or a big problem I’m trying to solve. This racing mind is great for being very productive over long periods of time, but it’s also a curse. I always have trouble shutting my mind off when I’m trying to sleep. I can almost never sit still. And, I try to maximize every minute of the day work-wise.

One of the very few times my mind calms down is on long drives, (really) long walks, or late at night (ironically when I’m not trying to sleep). I tend to do my best deep thinking after midnight – partly because my inbox and phone calms way down. There are little to no outside distractions, and my inbox is usually clean. However, this calmness also replaces the frenetic daytime filter that holds back your deeper thoughts (good or bad). That’s why (I think) nighttime can be a bit of a truth serum - and why “these tears come at night.”

On my latest late night drive back from Baltimore, my mind was its normally calm state - when “Lucky” came on Spotify. I was not a big Britney fan as a teenager, and can’t say I’m all that familiar with her (huge) music catalog. But, her lyrics are surprisingly impactful for a 2000s pop superstar – and prescient.

Many pre-2020 founders now look as if they’ve been fighting in a trench war - especially when the masks are off, and their minds are clearer. I’ve been surprised by their true feelings, and mental condition - since by most definitions, they’ve been very successful. Although most founders are hard to satisfy, and always think they could be doing more - there is (usually) nothing missing from most of their lives. Many founders could turn around, package up the company, and sail into early retirement. Others could sell the company, fulfill an earn out, and be very comfortable. Some are really stuck without a paddle, but the experience is still valuable - and usually very hireable at larger companies.

As an investor, I tend to be much more of a listener than a talker with founders - after all, I’m not driving the car forward. If anything, I’m in the back seat occasionally giving directions or observations. But, I’ve had to proactively step in more than usual over the last 6 months - and focus the conversation on their own mental situation. There have not been any true crises, but I’ve been stunned by the number of founders that feel beaten down, and near their limits. Many have privately expressed to me that they’re seriously thinking about quitting. Some are in my own portfolio, and some are not. However, the mentality seems to be more pervasive right now than most investors/peers realize.

I’ve had many odd jobs in the past, but I’ve never been a real coach, or therapist. And while I’m married to a therapist, she often reminds me that I have no clinical training or licenses. So, I’m not entirely qualified to treat anything. But, I can offer the investor perspective on this situation - granted, it may not be a universal perspective among the VC community.

Britney has/had a true mental health issue - “Lucky” should have been a not so subtle hint to her family/inner circle. But, most of the founder conversations and body language I’m seeing is from exhaustion, frustration, and generally feeling like the company should have a fresher, new CEO. When I invest in a company, I’m betting on the founder(s) - not some outsider a Board hires 5+ years into the company lifecycle. I have no interest in an outsider running the company - I want the founder(s) running the company. Outside of a true crisis, or immovable issue, founders should run the company until they hit a real inflection point (not a mental block). That inflection point could be an acquisition, majority stake raise, or hitting significant milestones (where the team needs to be reconstructed for a much bigger future exit). I’ve seen several $2m-5m ARR stage founders hand off the reins, and candidly, I hate it.

Founders have a level of responsibility, pride, and built-in attachment to companies that outsiders rarely match. After sinking sleepless nights, endless hours of fighting for every sale, and the company/founder becoming essentially the same thing - it’s not just a job. It’s the critical part of their lives. And, almost no one else can match that level of dedication, familiarity, and fight.

From the investor lens, I want my founders to stay at their companies. While there are situations where change is necessary, I don’t think these situations are all that common (outside of the first 2 years of the company) with sub $100m exit companies. I might be a little selfish in offering on demand pep talks, or listening sessions. However, I do genuinely believe that sticking with a company through an exit is better for most founders (and their companies/team members). I also strongly believe that more founders need to hear the following:

It does not matter how many peer groups you’re in, or other founders/investors you talk with - running/building a company is a lonely experience. It’s also an incredibly challenging, and somewhat thankless job. There will be some “keep it up!” and “awesome job!” type responses to investor updates, but that’s essentially getting a high five a few miles into a marathon. There is going to be a lot of struggle, adversity, and quiet second thoughts about everything. There will be moments where you second guess yourself, or want to quit. But, there will be highs too - it’s the natural roller coaster lifecycle of building a company.

Every founder and every situation is different. There is no way to have a universal solution, or even one that is consistently effective. But, most good fund managers will want to hear the good, bad, and ugly - including non-quantitative things. I can only speak for myself, and want the relationship to be a two-way open street. I’ve told a few founders that I was disappointed in them, and I’ve been probably too honest in other cases. However, for most founders, I’m generally giving a lot of mini pep talks and trying to figure out tactics to make the roller coaster ride easier. If I bet on a founder, I want them to succeed.

I need to practice what I’m preaching in my own life, but it’s OK to slow down and take breaks. No one can work at 100% every day, and every week. There are times when you truly need to be “on” - raising a round, selling the company, or closing a critical client. However, outside of these peak times, you can dial it back a bit. The best marathon runners now train this way too - with only 7-8% of training at the highest intensity. While I still have high expectations for founders, I also want to see them to take care of themselves. This could mean more breaks, some vacations, and open communication with investors. Building a company to a $30m, $50m, or even $100m exit is still a marathon - and founders should feel like they can make it to the finish line.