Why a London VC takes care of its entrepreneurs


In addition to providing capital, should VCs provide some level of pastoral care to their portfolio founders?

Well, even if judged purely commercially, the answer to that question could be yes. It can take many years to get a startup company to the point where an exit can be achieved and a lot can go wrong in that time. The entrepreneur may lose focus, burn out, or simply find that he or she no longer has the heart or will to give 100 percent to the job. So if a VC wants to recoup its investment, it makes sense to take care of the geese that have the potential to lay the golden eggs.

And according to a report published last week by Balderton Capitall – a London-based VC that invests in early stage and growth stage European companies – there is evidence that at least some founders are struggling to cope with the pressures and challenges of growing their businesses in an increasingly more competitive environment. Concurrent with the research results, Balderton has launched his own “Wellbeing and Performance” platform, designed to provide help and support to his cohort of portfolio entrepreneurs.

I spoke to Suranga Chandratillake, a General Partner at Balderton to find out more.


The equation work/success

It should come as no surprise to anyone that founders of venture-backed companies are often driven people who work long hours. Indeed, 90 percent of those who took part in the Balderton survey acknowledged that they push themselves to work harder and longer. A slightly smaller subgroup – 84 percent to be exact – said entrepreneurs had to work hard to be successful.

Where do those expectations come from? Sometimes from investors, it seems. Just over half of respondents said investors and board members put pressure on them to be constantly available.

Diminishing returns and bad decisions

This is where things start to get tricky. People starting their own businesses are usually not afraid of hard work and a culture of long hours can become something of an indicator of commitment. But spending too much time in the office can be counterproductive at worst and a little pointless at best.

More than four-fifths of business owners surveyed said there was diminishing returns from “simply working more hours”. And if you take a step back to look not only at the work culture, but at the stress and worry that come with running a business, there’s a danger that performance will suffer. Entrepreneurs are well aware that burnout, anxiety and depression are the bedfellows of bad decision-making.

So how do you get the balance right between working hard and pushing yourself to the point where things start falling apart? And if you’re one of those people who knowingly stays late at the office for no good reason, but keeps doing it anyway, how do you change that behavior?

As Chandratillake sees it, investors can play a role in supporting founders through difficult and stressful times, but this is often on an informal basis. “As a company, we have spent years helping founders and CEOs with the challenges they face,” he says. In practice, that can simply mean having a conversation about a particular problem.

The company’s Wellbeing and Performance platform has introduced something more structured. As Chandratillake explains, the initiative aims to provide assistance in three areas: health and wellness, coaching, and peer-to-peer conversations. But what does that look like in practice?

“We have a physical program run by medical experts,” says Chandratillake. “They’ll test you and make recommendations — about diet, exercise, or sleep, for example.”

In addition, Balderton has hired an executive coach who will provide a program of meetings to discuss management and decision-making issues with individual founders.

And finally, Balderton has arranged for startup leaders to meet in groups of five to seven. “We organized it to bring together CEOs who live in the same cities. It is a program where founders of non-competing companies can connect with each other and discuss common issues.”

As Chandratillake acknowledges, the initiative is only open to CEOs and founders in the Balderton portfolio, but he says he’s willing to discuss similar programs with other VC firms.

A long trip

But is this initiative just a good deed in an evil world or is it driven by commercial logic?

“We’re not selfless,” says Chandratillake. “We invest in companies and the journey can take 5, 10 or 15 years. During that time, anything we can do to help the CEO stay focused is positive.”

The arrangement is voluntary, and Chandratillake insists that while Balderton pays for health checks and coaching, the company is not personally involved. For example, conversations with medical professionals or even the executive coach are confidential. “So we don’t know about your cholesterol level or anything like that,” he says reassuringly.

That should encourage more founders to participate and could be an incentive to adopt habits and practices that improve performance and reduce stress. With 72 percent of respondents saying they found it difficult to prioritize wellbeing and 61 percent saying finding support was difficult, outside help can be helpful.