Forbes calls depression an epidemic among entrepreneurs and creatives.
Considering how much the game of entrepreneurship is idolized and associated with words like “freedom” and “autonomy,” the emotional side of building companies doesn’t get talked about that often. A more controversial, and letter-known insight, is that entrepreneurs report significantly higher mental health issues than everyday working professionals. According to a study at UC Berkeley, 72% of entrepreneurs in this sample self-reported mental health concerns. Entrepreneurs were significantly more likely to report a lifetime history of depression (30%), ADHD (29%), substance use conditions (12%), and bipolar diagnosis (11%).
Having been both a founder and an investor, these statistics are troubling.
In 2013, Inc Magazine published a bombshell article titled, The Psychological Price of Entrepreneurship. The piece went massively viral, and for a moment, sparked meaningful conversations on how emotionally taxing the startup journey can be (that is, before the world went right back to celebrating new funding round announcements on TechCrunch).
Then, in 2015, I came across this article on Business Insider about Faigy Mayer, a 29-year-old startup founder, who jumped from a rooftop bar and died. And at the time, a lot of the people I knew within the entrepreneurship community were very fixated on this story. As we all were when we heard Zappos founder, Tony Hseih, had died in November of 2020 from a combination of drugs, a house fire, and mental illness.
Large contributing factors here are hereditary and family history of things like bipolar disorder, depression, and substance abuse. But the lifestyle that comes with being an entrepreneur doesn’t help. If anything, being an entrepreneur exacerbates these issues—which is why they are so prevalent in the startup community.
For a few reasons:
Firstly, financial problems are the leading cause of depression and anxiety.
According to Aspen Institute, “In the US alone, individuals who struggle to pay off their debts and loans are more than twice as likely to experience mental health problems, including depression and anxiety.”
Furthermore, 16% of suicides in the US occur in response to a financial problem.
Well, the unfortunate reality is these types of problems are everyday occurrences in the life of an entrepreneur. Especially when you are playing the startup game, you wake up every day knowing your investors are expecting outsized returns on their money, yesterday. You don’t have the luxury of not having financial problems.
Second, depression and anxiety are often associated with relationship problems.
The leading cause of divorce is financial issues—even more so than basic incompatibility.
This means the financial stress entrepreneurs endure ends up eroding multiple aspects of their lives. It comes out with your significant other who has to live with this stressed-out version of who you’ve become. It presents itself in the friends you make, or the transactional nature in which you start to treat those around you. It may even rupture friendships and relationships with family members who simply can’t relate to your experience.
“I don’t get stressed out about my job,” they might say, from a position of never having had to scramble to raise money in order to make payroll.
And all of this is what leads to feelings of isolation.
No one understands me. No one is supporting me. I’m all alone.
So, if you are an entrepreneur, I have three completely disparate and separate solutions for this.
1. Take care of your mental health by surrounding yourself with the right kind of people.
With anything mental health related, it’s all about your support structure.
The startup journey is unlike any other life journey. It’s like training for the Olympics. You only “get it” if you’ve trained for the Olympics too.
As a result, you can’t expect your family, friends, or even your significant other to be able to support you in all the ways you need. They’re not entrepreneurs. So, respect their opinions, honor the relationship, but realize you need different types of support in your inner circle. You need people to talk to who have been there, or are going through what you’re going through, and who can relate to you on an emotional level.
The important nuance here is: these people should not be people you have a financial relationship with. They’re not your employees. They’re not your investors. They’re not your co-founders. These are just people you know, who you can call for advice and won’t give you any pressure.
You need to be able to be vulnerable.
2. Become financially literate—and independent.
The second solution here is to understand what game you’re playing from a financial perspective.
Too often, startup founders put their entire heart, soul, bank account, and identity into their startup. And that’s a recipe for disaster. When you do this, you end up taking a disproportionate amount of risk for something that has a 90%+ failure rate. The startup journey is stressful enough. What you don’t want is for the business to not work, and to have lost everything—financially and emotionally—in the process.
You need to make sure your personal situation is taken care of and okay.
How do you do that?
- Pay yourself first
- Have other income streams (e.g. a rental property) in place
- When you raise money, take a salary
- Consider a side hustle while you build your startup
There’s no glory in being broke.
3. Learn about how to leverage secondary markets.
My third solution here is only applicable to founders who have achieved some degree of traction.
When this is the case, you can take advantage of secondary markets. The founders of Clubhouse did this after they raised their first round from Andreesen Horowitz. The company raised $10M at a $100M valuation, and each founder took $1M off the table in secondary markets to pay their bills while they built the future. This is becoming more and more prevalent in a world where high-flying founders are worth tens or hundreds of millions of dollars on paper but have zero liquidity—still living in a tiny apartment in San Francisco eating ramen.
Now, some VCs and investors don’t like this, because they want their founders and early-stage employees to stay “hungry” (pun intended). But I think that’s incredibly cruel. It’s also incredibly stupid, because then the founder lives in an extreme state of uncertainty—they’re broke, and they’re worth $100 million, at the same exact time.
The last thing I’ll say on the topic of mental health is: just get therapy.
Everyone needs it.
But startup founders, especially, experience significant isolation and very little outside understanding. We applaud startup founders, and the media loves a good unicorn story, but the journey there is incredibly misunderstood. Having a therapist is becoming more and more popular, and even expected, in the world of entrepreneurship.
Otherwise, you don’t have very many other people you can talk to.