Investors in Wellbeing

Human Sustainability

You may be familiar with the term “impact investing” or “sustainable impact investing”. These investment strategies aim to generate specific positive impacts socially and environmentally in addition to long-term financial returns.

While impact investing has been growing in popularity as environmental and social concerns have surged, another area of sustainability has been quietly gaining traction: Human Sustainability. This speaks to the need to care more holistically for human-beings and ensure that they have access to health, education, skills, knowledge, leadership and services that sustain their growth.

When an individual lacks access to these resources and does not experience balance in their life, their overall wellbeing declines and they are not sustained. Economic, social, and environmental sustainability become secondary as employees arrive at work empty, disconnected, and unable to participate in good decision making. The exhaustion renders them unable to achieve high performance goals, find innovative solutions, and fully engage in their communities.

Unhealthy coping mechanisms (i.e. longer work hours, sleep deprivation, use of medication, abuse of drugs, alcoholism, and other addictions) are used to sustain 24/7 activity. The objective: achieve more at all costs.

However, when individuals are operating in this way, their ability to perform, focus, and make decisions are all impaired. Poor wellbeing leads to declining physical and emotional health.

It does not take a genius to point out the cataclysmic results that occur sooner or later. Tragic consequences unfold that impact the economy, society, and the environment.

The starting point of sustainability is human sustainability.

Investing in Wellbeing

When it comes to investing, both private and professional ventures want to ensure they are making good decisions with regards to theirs and their client’s portfolios. There are a myriad of investment theories, strategies, and protocols adopted to ensure portfolio management and growth.

We partially assess human beings themselves when we make investment choices. Investors decide to invest in a company based on performance and with awareness of a leader’s track record. When venture capital and private equity firms determine what to invest in, the quality of an organization’s leaders play a significant role in investment outcomes.

Today, we are emerging beyond sole performance evaluation. A new era of assessing individuals based on character has entered the decision making arena.

An Electronically Traded Fund (ETF) launched recently as “Return on Character” (Trading as ROCI). As Bloomberg highlighted, the fund seeks capital appreciation by targeting the stocks of businesses led by “high character” chief executive officers. The article goes on to say the model is based on “integrity, responsibility, forgiveness, and compassion,”.

Society at large and investors themselves are beginning to turn their attention to what makes us more human, not less.

Future employees are asking: “How will you enhance my wellbeing?” A large salary and long list of perks does not cut it anymore. These are nice and for some industries they are expected, but they are not getting to the heart of what holistic wellbeing looks like.

We are all susceptible to emotional wellbeing struggles; however, in many cases, leaders and entrepreneurs are even more likely to experience these. The most engaged employees in your organization are the ones most likely to burn out. In the world of entrepreneurship, there is evidence to show that entrepreneurs are 10x more likely to experience bi-polar disorders. With 72% experiencing mental health issues, that is a whooping 22 million people in the U.S. alone struggling with emotional wellbeing.

Worldwide it is estimated that 3.9 billion (5% of the world’s population) people struggle with depression.

What Changed?

Even before the pandemic, attention was beginning to turn towards putting the brakes on toxic cultures in startup life and business.

High profile fraud cases began to grab our attention. Unhinged individuals posed as entrepreneurs and convincingly raised illegal funds, armed with nothing more than empty promises; consider the stories of Elizabeth Holmes, and Billy McFarlane.

Unicorn companies meanwhile seemed to gallop ahead and we celebrated and chased their meteoric rise. That is, until it all came crashing down changing the lives of employees and investors; consider the story of co-founder Adam Neumann and WeWork.

Then along came the pandemic. And like never before this catapulted the theme of wellness and wellbeing into everyone’s mind. Once the shock began to settle, questions started to be asked. Questions surfaced like: “Why am I doing this? What’s the point of my life? What’s the need? Is this all there is to life? Do I want this?”

In the face of fear, survival questions come flooding in and force us to reconsider and make adjustments to our lives. The “Great Resignation” describes the fast revolving doors as people quit their jobs en masse in the wake of discovering, thanks to the pandemic and prior leading indicators, that there must be more to life.

The Rise of Wellbeing

There has been a rise in WellTech: an industry focused on technology enhancing wellness and wellbeing. It has soared to an estimated and stunning $2.2 billion in investments, growing the wellness industry still further which is expected to reach $6 trillion by 2025. FemTech is also making leaps and bounds in growth and the industry is valued at $51 billion for 2022. Needless to say, our attention and focus has fully turned to wellbeing and it won’t stop here.

Countries are stepping up; with the U.E.A. appointing a Minister of Happiness, and Finland promoting the wellbeing economy.

Investors are more interested in the wellbeing of founders for startups, asking questions about how to care for their own wellbeing and ensure the company is led by someone who is balanced and capable of making good decisions long term, all while generating growth. They’re asking questions like: “Will the founder’s emotional wellbeing enhance or diminish the investment? Will the leadership achieve maximum growth and will all risks be mitigated?”

Many are beginning to understand that when individuals are out of balance, it has a huge financial impact on investment. In light of this, Venture Capital and Private Equity firms, such as 11 Tribes, are ensuring the founders of their portfolio companies are using 2% of the investment dollars for Founder wellbeing. This kind of investment is a safe-guard against leadership burn out. It doesn’t stop with 11 Tribes, other firms such as Crosscuts are up to similar things.

It’s not just the founder we need to be considerate of. What about the emotional wellbeing of the investors? Is the Venture Capital firm you’re about to work with emotionally stable? How are individuals handling their own stress? Is anxiety and burnout rife among the team? If your investors are burnt out, their ability to provide resources, advice, and guidance to your business will be diminished. Becoming more aware of emotional wellbeing is critical to all sides of the formula.

You can not turn a tap on harder to make more water come out if the plumbing needs repair work. All plumbing requires maintenance.

Wellbeing is here to stay, it is already an enormous market and will continue to grow rapidly. Yet beyond the financial excitement that many are focused on, if the end goal is to create a more sustainable future for entrepreneurs, we must first find ways to support and sustain human-beings physically, emotionally, and spiritually.

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