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I'm not sure managing mental health while running a start-up is a topic we want VC blogs to be the experts on. VCs are a substantial part of the problem here w

by TimPC 4y ago

I'm not sure managing mental health while running a start-up is a topic we want VC blogs to be the experts on. VCs are a substantial part of the problem here with their decisions to use a power imbalance to get founders to take little to no salary for as long as possible to extend the runway of the company. A lot of pressure on founders is financial as their personal finances are often a mess even as their company is taking off. Many VCs have a long history of making this problem worse. Data shows that founders over 50 are the most successful age group yet VCs continue to focus on 20 somethings because few founders over 50 are able to handle the financial terms the VCs want on things like founder salary. I'm convinced we lose a lot of potentially good start-ups by requiring founders to take vows of poverty. We need a coherent approach to mental health for founders. We need a coherent approach to mental health for early start-up employees. VCs are part of the problem and accepting their recommended solutions will make things worse not better.

brianwawok 4y ago
Not all startups need VC. Found one of those.
- bspear 4y ago
  More people need to understand this. Most businesses are not designed for VC pace and scale. But they can be excellent cash-flow and profitable businesses
rkk3 4y ago
> VCs are a substantial part of the problem here with their decisions to use a power imbalance to get founders to take little to no salary for as long as possible to extend the runway of the company. This might be true with some Accelerators or Angel Investors not VCs. When A16z or other VC's write a 10mm dollar check they don't pressure their founders to have poverty line wages... if anything they try to get the founders to go buy a Ferrari they can't afford.
- daniel-cussen 4y ago
  I would say both, well not buy a Ferrari get a lease for a Ferrari, with a killer monthly payment, he's on the hook with twenty signatures, debt, then...ramen. Live in the Ferrari. So everyone sees him and says wow VC money he got funding but when he visits Sand Hill Road he's eyeing the sugar packets in the coffee thing.
  - rkk3 4y ago
    Ramen profitability is a stage in the startup lifecycle, but it's associated with very early stage (tens or hundreds of thousands in investment) & specifically with the accelerator that runs this website... it is not associated venture capital funded businesses, they have different problems
    - daniel-cussen 4y ago
      I don't know I knew one startup that had a full fridge of redbulls no energy drinks missing and they were killing me with interviews, I aced all of them but it was exhausting. So I see the fridge and a little sign that said "these snacks are the VC money we're burning through!" but later I see the red bulls and I just take one and tell them I had to, they were grilling me and it was a full fridge. So from the faces thinking back they saw that as an attitude problem because those energy drinks were decorative. That's why it was absolutely full, because otherwise there'd be some missing from people taking them before restocking. I was supposed to look at them and think I could have them if and when I got a job after their day of interviews, not actually drink an energy drink to drink actual energy (literally glucose for blood sugar strictly for the brain function they were demanding a lot of). Happened another time in Chile, there was a really nice foreign beer in the fridge, there was the rule printed on the fridge take whatever you want, but I ask anyway to be polite. The debtor founder does two menacing deflections, but I was incapable of fearing him, then is like "Drink it! Drink it! It's all yours, happy you have it!" making a huge deal of his graciousness but like doing the menacing tone and thoroughly resentful. Decorative beer, make the fridge not look empty, and therefore the poor startup not look poor. It's just hard to see a workplace as a source of sustenance when the fridge is empty. And in fact that was to impoverish the employees without them catching on, drain them without getting drained back. Like the first place I mentioned, even on strictly caloric terms, thinking uses a lot of energy, chess players burn calories like swimmers, interviews are like chess matches. So literally the red bull was a literally a sugar packet. I said it meaning to exaggerate, I now realize I turned out saying the literal truth instead. I wasn't attuned to the fact I had to eye it and not consume it. And depends on the startup. I would say YCombinator may want founders to eat ramen, they say this publicly, but actually eat it not starve refusing to eat decorative ramen. That I'm fine with. Frugal food is defensible, it's good, and further at the dinners they actually have dinner, rice and beans which is perfectly good frugal food and they make sure founders don't end up in the emergency room from malnutrition, far from it. I didn't see many companies in Silicon Valley but at one of them, funded by Elon Musk who is allegedly a tyrant, evidently not, the calories weren't there just for decoration. They actually were there for the employees to turn them into labor. Pretty good, pistachios coffee pumpkin pie, I even brought bags of glucose to store in the kitchen to make glucose water, no other way of sustaining the amount of work I was doing. But it wasn't just bring your own sugar packets. There was table sugar I'd use sometimes, it's just not as good as glucose. And there what was happening is at Halcyon, the company Musk was funding, they were developing a monopoly on a new technology, so the expectation was they'd have actual profits, and wouldn't have to squeeze every penny out of every person they could (like the other two) while maintaining an appearance of wealth so people expected the sustenance would go the other way and let their guards down. Like I said, live in the Ferrari. Eye the sugar packets.
padobson 4y ago
There's also a compounding effect. A vow of poverty founder is going to try to get his first ten employees to take a similar vow, just out of principle and (maybe) spite. So the VCs are essentially trying to create a culture of financial stress in hopes that it will motivate. I've gotten offers from a handful of startups, but turned them all down because they wouldn't meet the salary offers I was getting from other, more stable employers. They said the equity would make up the difference, but I didn't view that as base comp, I viewed it as risk maintenance in case the startup failed.
CrackpotGonzo 4y ago
Agreed that it requires a coherent approach and trained individuals to handle the nuances of mental health for founders. There was just a good piece on this published in the latest issue of In the Works (publication from Help Scout). https://intheworks.helpscout.com/co-founder-relationships/ https://intheworks.helpscout.com/co-founder-relationships/

by TimPC 4y ago

brianwawok 4y ago

Not all startups need VC. Found one of those.

bspear 4y ago
More people need to understand this. Most businesses are not designed for VC pace and scale. But they can be excellent cash-flow and profitable businesses

rkk3 4y ago

> VCs are a substantial part of the problem here with their decisions to use a power imbalance to get founders to take little to no salary for as long as possible to extend the runway of the company. This might be true with some Accelerators or Angel Investors not VCs. When A16z or other VC's write a 10mm dollar check they don't pressure their founders to have poverty line wages... if anything they try to get the founders to go buy a Ferrari they can't afford.

daniel-cussen 4y ago
I would say both, well not buy a Ferrari get a lease for a Ferrari, with a killer monthly payment, he's on the hook with twenty signatures, debt, then...ramen. Live in the Ferrari. So everyone sees him and says wow VC money he got funding but when he visits Sand Hill Road he's eyeing the sugar packets in the coffee thing.
- rkk3 4y ago
  Ramen profitability is a stage in the startup lifecycle, but it's associated with very early stage (tens or hundreds of thousands in investment) & specifically with the accelerator that runs this website... it is not associated venture capital funded businesses, they have different problems
  - daniel-cussen 4y ago
    I don't know I knew one startup that had a full fridge of redbulls no energy drinks missing and they were killing me with interviews, I aced all of them but it was exhausting. So I see the fridge and a little sign that said "these snacks are the VC money we're burning through!" but later I see the red bulls and I just take one and tell them I had to, they were grilling me and it was a full fridge. So from the faces thinking back they saw that as an attitude problem because those energy drinks were decorative. That's why it was absolutely full, because otherwise there'd be some missing from people taking them before restocking. I was supposed to look at them and think I could have them if and when I got a job after their day of interviews, not actually drink an energy drink to drink actual energy (literally glucose for blood sugar strictly for the brain function they were demanding a lot of). Happened another time in Chile, there was a really nice foreign beer in the fridge, there was the rule printed on the fridge take whatever you want, but I ask anyway to be polite. The debtor founder does two menacing deflections, but I was incapable of fearing him, then is like "Drink it! Drink it! It's all yours, happy you have it!" making a huge deal of his graciousness but like doing the menacing tone and thoroughly resentful. Decorative beer, make the fridge not look empty, and therefore the poor startup not look poor. It's just hard to see a workplace as a source of sustenance when the fridge is empty. And in fact that was to impoverish the employees without them catching on, drain them without getting drained back. Like the first place I mentioned, even on strictly caloric terms, thinking uses a lot of energy, chess players burn calories like swimmers, interviews are like chess matches. So literally the red bull was a literally a sugar packet. I said it meaning to exaggerate, I now realize I turned out saying the literal truth instead. I wasn't attuned to the fact I had to eye it and not consume it. And depends on the startup. I would say YCombinator may want founders to eat ramen, they say this publicly, but actually eat it not starve refusing to eat decorative ramen. That I'm fine with. Frugal food is defensible, it's good, and further at the dinners they actually have dinner, rice and beans which is perfectly good frugal food and they make sure founders don't end up in the emergency room from malnutrition, far from it. I didn't see many companies in Silicon Valley but at one of them, funded by Elon Musk who is allegedly a tyrant, evidently not, the calories weren't there just for decoration. They actually were there for the employees to turn them into labor. Pretty good, pistachios coffee pumpkin pie, I even brought bags of glucose to store in the kitchen to make glucose water, no other way of sustaining the amount of work I was doing. But it wasn't just bring your own sugar packets. There was table sugar I'd use sometimes, it's just not as good as glucose. And there what was happening is at Halcyon, the company Musk was funding, they were developing a monopoly on a new technology, so the expectation was they'd have actual profits, and wouldn't have to squeeze every penny out of every person they could (like the other two) while maintaining an appearance of wealth so people expected the sustenance would go the other way and let their guards down. Like I said, live in the Ferrari. Eye the sugar packets.

padobson 4y ago

There's also a compounding effect. A vow of poverty founder is going to try to get his first ten employees to take a similar vow, just out of principle and (maybe) spite. So the VCs are essentially trying to create a culture of financial stress in hopes that it will motivate. I've gotten offers from a handful of startups, but turned them all down because they wouldn't meet the salary offers I was getting from other, more stable employers. They said the equity would make up the difference, but I didn't view that as base comp, I viewed it as risk maintenance in case the startup failed.

CrackpotGonzo 4y ago

Agreed that it requires a coherent approach and trained individuals to handle the nuances of mental health for founders. There was just a good piece on this published in the latest issue of In the Works (publication from Help Scout). https://intheworks.helpscout.com/co-founder-relationships/ https://intheworks.helpscout.com/co-founder-relationships/