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Prenup for a Startup 5: In Sickness and Health




















Last week was a rough week in this household. My partner had an operation and he wasn't allowed to move for a week, the helper fell and broke her collarbone, so she couldn't move and I developed a boil the size of a small melon, which meant I was a pulsating ball of pain and all I wanted to do was crawl into a corner of my cupboard and never move again.


Our combined physical pain and immobility meant that nothing except the bare basics could be done in triple the amount of time, we were too sore to be creative or productive and made a conscious decision to not only grunt at each other but stay civil and accept that this too shall pass. Everything felt "meh" but, it did make me think long and hard about the impact of health on founders, co-founder relationships and their business.


Fitness, Fulfilment and Foresight, an annual report published by KPMG Australia High Growth Ventures, confirmed that a founder's personal performance is the determining factor for the success of their business. Personal performance is directly linked to the state of the founder's mental and physical health.


The Founders Dilemma, revealed that 65 percent of startups fail due to ineffective founder relationships. Low estimates indicate that lack of well-being accounts for at least a third of that 65 percent. That means a staggering 21 percent of startups fail due to challenges with the mental and physical health of the founder.


Talking openly about mental health issues such as stress, depression or anxiety has only recently lost the stigma of shame and failure for founders and it certainly meant that founders realised that they are not alone. It doesn't mean that founders are comfortable talking about it and it doesn't mean that they are actually talking about it to their co-founders before it becomes an issue.


Mental and physical health are intertwined. You have to take care of both. Loneliness, stress, anxiety about the business, lack of healthy relationships can lead to physical symptoms such as headaches, fatigue, muscle cramps while chronic pain and ill health can lead to depression, stress and anxiety. Not looking after your whole self can turn into a vicious circle and a downward spiral for your business.


Physical and mental health issues can be particularly problematic for entrepreneurs since their ability to lead in their business and maintain healthy relationships with their co-founders is directly linked to their personal wellbeing. Depression, chronic pain, headaches, anxiety, heart palpitations, no time to exercise can all lead to conflict and a toxic work culture.


All of us have an emotional bandwidth; the physical energy or emotional capacity to deal with the requirements of our daily lives and the ability to assess our emotional state accurately. The better we feel the more 'in-range' we are and the better we can deal with decisions, situations and the people around us. The more stressed, irritated or anxious we become the more 'out-of-range' we are and the way we deal with people and situations are far from ideal. We become irritated, sharp, cranky, over tired and unable to make effective decisions and sometimes just want to be left alone; not see anyone and not deal with anything. Regular 'out-of-range' feelings or episodes will certainly lead to more conflict between founders.


The wellbeing of your mind and your body determines how "within range" you manage to stay even under pressure. How quickly you go out of range and how long it takes you to regroup and get your nervous system back to equilibrium. It is not about being calm all the time, it is about emotional and nervous system resilience. (Always being calm is not ideal, always being anxious and stressed is also not ideal. You need range, but you need a range that you, and not other people or circumstances, are in control of.) It takes a lot more self control and self awareness to stay calm and centred when you are dealing with other people and their demands while you are in pain. It requires huge amounts of quiet courage to get out of bed, face the day and be excited to meet funders when you are depressed.


This blog is not about telling you how to prioritise your mental and physical health. The stats speak for themselves. Most founders know what they are supposed to do to maintain peak performance and optimal relationships, yet very few founders ever talk about:

  • what would happen if one of them fell seriously ill with a need for long term care or recuperation

  • what would happen if one of them had a nervous breakdown or became deeply depressed

  • what would happen to the business and the founder team if one member died.

Most people don't like talking about the unpleasant stuff. We prefer to focus on the pleasant things we can control and ignore the topics that make us feel vulnerable and or weak, yet these are precisely the ones we have to put on the table. Below are some suggestions to think about and some questions to start with.


Think about:

  1. Can you talk to your co-founder about your mental health issues or are you too scared or ashamed to be honest about your depression or anxiety?

  2. What would be the impact on yourself, your co-founder and the business if one of you fell seriously ill and was unable to work for a couple of months?

  3. Does your company culture include behaviour that could have a detrimental effect on your mental or physical health?

  4. If your co-founder is unable to perform their role due to physical or mental illness, do you know enough about their expertise to fill in the gaps or brief someone who has to take over in detail?


Questions to discuss with your co-founder:

  1. What kind of behaviour is acceptable or unacceptable while you are suffering from mental health issues? is it ok to stay in bed for days and miss meetings? Is it ok to yell at staff or not respond?

  2. What guidelines should you put in place to navigate prolonged physical or mental illness of founders and the impact thereof on the business?

  3. How long can someone be ill or unable to perform before they have to relinquish their role or dilute their responsibilities?

  4. How is the money going to work if someone can't fulfil their role? What if they don't have insurance?

  5. What happens if one of you die? Have you made any allowances for this in your shareholders agreement?

Remember:

  1. It is never a good idea to have a serious discussion about someone's bad behaviour while they are in the midst of a melt down. You have to wait until they can hear you before you can address the issue.

  2. Sometimes you just have to let it go. Never in a way that violates your boundaries or condones unacceptable behaviour but you don't have to respond to every argument you are invited to. Especially when you know that your partner is not feeling well.

  3. How well you can regulate and increase your own emotional bandwidth will have a direct impact on how you react in stressful circumstances and these include potential conflict with your co-founders while they are not in their best space.





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