Startup founders are “exhausted”, run down and lacking in hope — with more than half saying they have experienced burnout in the last year.
As the tough economic climate continues to bite, fundraising is still hard, and the race to get into the black is leaving many founders feeling “permanently stressed,” as one respondent put it.
That’s taken its toll, with many experiencing physical or mental health issues, a recent survey of 138 founders conducted by Sifted has found. Two-thirds of respondents are male, a third are female and the rest are non-binary or prefer not to say. Just under a third are solo founders.
Of those surveyed, 54% said they had experienced burnout in the past 12 months; 46% of founders said their mental health has been ‘bad’ or ‘very bad’; while 75% said they’d had anxiety in the same period.
Two thirds said they had considered leaving their startup, while 39% said they would consider doing so in the coming year.
“I don’t see a way forward,” one founder tells Sifted. “It will take too much effort including fundraising so I’ve actually already decided to shut down the business. I can feel my health improve already even though I will lose a substantial amount of funds.”
Work-life imbalance
Asked about their work-life balance, 49% of respondents said their workload has increased in the last year, with 67% working over 50 hours a week.
“We grew our team rapidly in the last 12 months and this resulted in an increased workload for me as managing the team's work, schedule and mental state ended up being my responsibility,” one said.
For some founders, the increased workload has been positive: “We have more clients. There are higher stakes. It is absolutely awesome,” said another.
For the majority of founders (72%) working more has meant making fewer social plans. Almost two-thirds (61%) said they had taken fewer holidays in the last year.
Just under half (47%) said their exercising routines had slipped, with 36% admitting that eating healthy had become less of a priority.
“Product is going well so there's more work. Fundraising — epic level of work. The things that kept me below the red line (diet, exercise, reading, etc.) have been set aside and it starts to accumulate,” said one founder.
“You wake up at 4am when your dream suddenly becomes about fundraising and your parasympathetic response goes into overdrive and you can't sleep anymore.”
Tired and burnt out
Over half of respondents (54%) said they have experienced burnout in the last year, with an equal number suffering bouts of insomnia.
Only 6% of founders said they had no mental health issues in the last 12 months, while almost all (83%) said they have experienced high stress.
Many reported experiencing imposter syndrome, with higher rates for women respondents (46%) and non-binary respondents (100%), compared to men (43%).
Fundraising is still tricky
As with last year’s mental health survey, fundraising remains the most common challenge founders face, followed by work-life balance. Customer retention was cited as the third biggest challenge for founders.
“Fundraising has become significantly harder, therefore we need to spend a lot more time on it than ever before," said one founder.
Respondents mostly all ran early stage companies: 35% are at seed stage, 28% are bootstrapped, 25% are pre-seed and 7% are Series A. The majority of startups (39%) said they had raised in the last 6 months.
Layoffs, hiring and the shifting political landscape were listed as the least challenging aspects of startup life right now.
Climate tech founders are struggling
Of the climate tech founders Sifted surveyed, 63% describe their mental health as “bad” or “very bad” compared to 43% of all other respondents.
Many cited a challenging economic environment as the reason for their lows. “Climate investments have suffered since the peak in 2021/2022. Private companies are struggling to prioritise climate investments, e.g. due to increasing inflation, war in Ukraine, energy costs etc.,” one said.
“We work in ESG. Donald Trump’s win affected the European green agenda, and major lobby groups in France and Germany have begun attempting to remove ESG requirements and legislation from European enterprises. This means that our market is uncertain and is under threat of collapsing," another said.
A further 46% of climate founders said they were considering leaving their startup in the next 12 months, compared to 39% of other founders.
For the majority, investor support is non-existent
Despite the difficulties, the majority of respondents (56%) reported receiving absolutely no help from investors when it came to their mental health, while just 3.6% reported receiving a lot. When asked who they turn to when in need of support, only 12% said their investors.
“I’ve lost my faith in the stories from investors about supporting founders and come to realise they will do what they need to make money [...] It grinds me down,” one respondent said.
To quit or not to quit?
The majority of founders (61%) said they would not consider leaving their startup this year. Those considering it reported feelings of high stress, loneliness and too much investment for too little reward.
“I often think I am just on life support and there is a major opportunity cost not just winding things up and getting a job,” said one founder. “The juice doesn't feel worth the squeeze.”
Another said: “I’m 62 years old and something has to change or this will kill me.”
The majority (37%) of respondents said if they were to leave their startup, they would take a break.
The second most popular choice was finding another company to work for, while the third was starting a new company.
If you are struggling with your mental health, there are many helplines staffed by trained people ready to listen. Mental health charity Mind offers a list of UK-based services here, but you can find a helpline wherever you are.
