There are very few things in this world more stressful than leading a startup. Founders have all the responsibility of regular business owners in addition to their constant fight for survival. Not a moment goes by when a founder can take a break from proving themselves- to their investors, their partners, and their customers (not to mention their families). They have to hit their KPIs, hire top talent, grow a company culture that lasts, pivot according to demands, all while struggling to raise funds and scale their company. It is a lot.

Yet, many investors fail to consider the emotional fitness of their founders; how mentally prepared they are to cross the entrepreneurial path successfully. Whereas factors like product-market fit, value proposition, and a solid business model are put under a microscope and dissected at length before any decisions are made.

When it comes to the startup team, the due diligence will usually come down to a good first impression, the chemistry created between the founders and investors, and mutual acquaintances that could positively reference the founders. Despite the analytical nature of VCs, this process of evaluating teams is primarily intuition-based and often led by bias.

This seems counter-intuitive, especially since the psychological elements of a startup’s success are paramount. The data speaks for itself- research from the venture capital database, CBInsights, broke down the top 20 reasons why startups fail and listed “not the right team” as the third leading cause of startup failure. Be it co-founder clashes, imposter syndrome, or a mentally inflexible CEO, these factors, psychological in nature, will most likely sink a startup if they are not properly detected and handled.

As I see it, it is in the VCs’ interest, specifically, those dealing with seed or pre-seed stages, to go beyond the money. To invest in their startup founders not only financially, but mentally. This does not start and end with an emotional assessment of a founder, it also means mentally supporting founders through those first few months and years while they navigate the incredibly tricky terrains of getting a new business off the ground by strengthening their emotional fitness: emotional regulation, mental flexibility, and intrinsic motivation.

As the Startup Psychologist who focuses on founder dynamics and performance enhancement, I have experienced countless founders entering my office in a state of crisis. Many times, all they needed was a safe space and the ability to talk to an empathic person who understands their position and is familiar with the entrepreneurial business jargon. It is in a place like this where they can finally take off their mask, put their extremely understandable stress on the table, and talk it through - leaving the room emotionally and mentally recharged.

Providing founders with capital alone and leaving them to cope with everything else that comes with starting a venture from scratch creates an unsustainable environment. If VCs wish to ensure the best for their startups, their founders’ emotional state should be considered a top priority and treated as such.

Written by Startup Psychologist Noa Matz, F2 Venture Capital Operating Partner