Burnout, Boundaries & Boardrooms: The Unique Struggle of Female Founders
Female founders have fewer investment opportunities than their male counterparts. They end up working harder and achieving more just to gain the same visibility. Combine that with being the primary caregiver at home and working moms end up feeling guilty for not investing more in their company AND for not spending more quality time with their family. The perfect recipe for burnout.
According to PitchBook’s Q1 2023 VC report, “In 2022, companies founded solely by women garnered just 2.1% of the total capital invested in venture-backed startups in the US,” [1]. Interestingly companies that had a female + male co-founder setup received nearly 9x percentage of VC capital.
Percentage of VC capital invested in female-only co-founders versus female-male co-founders since 2008.
Fortunately there are more women-led incubators and VCs, like The Fund XX, that invest in female founders. No matter who provides the capital, the relationship with investors-turned-board members can be a delicate balancing act. This is particularly true for startup CEOs — if they don’t deliver, they get replaced!
“Boards replace founder-CEOs in four out of five cases — even if their ventures meet inflection points and perform well,” [2].
In this article we’ll explore why founder-CEOs get replaced, the importance of establishing clear expectations and boundaries to prevent burnout, and how board composition can make or break a company.
The Paradox of Success
Noam Wasserman, Professor of Clinical Entrepreneurship at the University of Southern California, reviewed over 5,930 person-months of data assessing founder-CEO and board relationships in a study called “Founder-CEO Succession and the Paradox of Entrepreneurial Success” [3]. He says “the interesting paradox is that when founder-CEOs do really well, that also increases the chances that they’re going to be replaced.” This is because the founder, who was best suited to the early stage product development and initial market fit, has a different skill set than growth phase CEOs. In an interview with Wasserman he states
“My results show that whenever founders raise a new round of financing, the chances that they'll be replaced as CEO go up dramatically,” [4].
Case Study: Bullies in the Boardroom
Janine, like many startup CEOs, was overwhelmed and on the brink of burnout. The demanding milestones of her femtech company were manageable, but the frequent attacks from one board member in particular, Bob, was pushing her over the edge. Janine’s desire to be seen as capable, competent, and well-liked diverted her attention into satisfying Bob’s never-ending requests which meant less bandwidth for company strategy.
Bob's intrusive behavior included frequent calls, texts, and emails, often with an aggressive tone. This not only affected the company's performance but also took a toll on Janine’s mental well-being. Upon reflection, Janine realized that her interactions with Bob were reminiscent of her relationship with her father, revealing the influence of her family dynamics on her professional life.
Boundaries at Work
As startups scale they may require more frequent communication with the board and setting expectations for engagement becomes even more critical. To resolve the situation, Janine needed to set boundaries and establish expectations for communication with Bob. Upholding boundaries, especially with colleagues who use intimidation, can make the difference between energizing work and burnout.
5 Tips for Setting Boundaries:
Give yourself permission to draw boundaries!
Do you give yourself the right to speak up or to say no? Share your preferences authentically.
Notice what your body is telling you.
If you feel resentful, constricted, or guilty about something then you may need to have a difficult conversation - with a colleague or with yourself!
This one is particularly relevant for people pleasers:
If you feel under-appreciated at work then you may need to check if you are over-giving. Protect your energy.
Set external limits around the methods of communication
ie. What are your work hours? Do you let people talk over you?
If you learned conflict is not okay, then it can be difficult to not be the peacemaker.
Set internal limits and emotional boundaries by not taking responsibility for another person’s anger, frustration, or disappointment.
Entrepreneurship is an exciting and rewarding journey, but it's not without its challenges. As we've seen in the case of Janine, an overly aggressive board member can have a detrimental impact on company performance and the leader’s mental well-being. But by setting and upholding boundaries, CEOs can navigate stressful situations, build stronger relationships, and move their organization forward.
Note - Names and identifiers have been modified.
References:
https://pitchbook.com/news/articles/the-vc-female-founders-dashboard
Wasserman. “Founder-CEO Succession and the Paradox of Entrepreneurial Success.” Organization Science Vol. 14, No. 2, March–April 2003, pp. 149–172
https://hbswk.hbs.edu/item/the-founding-ceos-dilemma-stay-or-go
