Buyer Beware: Why Investors and Mental Health Practitioners Must Sit on the Same Side of the Table


Are investors harming mental health care?




Over the past few years, venture investment has surged in a previously sleepy vertical: mental health. Indeed, it can be hard to believe it was only a decade ago when a mere 3 deals worth $6.6 million represented the entirety of the mental health space.1 Prior to 2020, innovation oracles had forecasted a continued upward trajectory for mental health technologies, and their expectations have now likely been exceeded. No one could have predicted the events of 2020—including but not limited to the COVID-19 pandemic, social injustice, civil unrest, environmental crises, and mass misinformation—would have such a catalytic effect on the burgeoning field, spurred on by the necessity of virtual care, lower perceived barriers to adoption, and inflamed mental, emotional, and spiritual state of the nation. As it turns out, mental health technologies were not just a trend, but a tinderbox of innovation waiting to be ignited.

The turn of the decade saw a 3-fold increase in mental health technology funding over the previous year, with $1.8 billion invested in 2020 alone, and no indication of slowing down.2 Interestingly, most consumer-facing mental health technologies are not created by research institutes or corporations, but by entrepreneurs. Often inspired by personal stories of mental illness or burnout, these technologies are increasingly born from a desire for more efficient, engaging, accessible, and cost-effective forms of treatment. As a result of this passion-problem alignment, pitch decks espousing the disruptive potential of mental health technologies, like apps, wearables, virtual reality, and other vehicles for virtual care, are pouring into investor inboxes faster than ever before. However, these now open floodgates present an unprecedented problem: By directing funding, investors are increasingly responsible for driving trends in mental healthcare. Where money flows, trends will go—but what happens when those investments influence mental health care as we know it?

For the first time in history, investors and entrepreneurs with little to no background in psychology, neuroscience, medicine, or other mind/brain disciplines are steering the fate of consumer-facing mental health innovation. While investments in biotechnology and pharmaceuticals are largely made with the engagement of medical doctors, scientists, and clinical researchers, investments in the mental health space are often made by investors with limited credentials, other than an understanding of consumer desire. However, an investor’s knowledge of consumers is of limited value when the consumer is best characterized as a patient. Moreover, mental health technologies represent a largely unregulated space; there are few enforceable guidelines, best practices, and regulations steering this burgeoning vertical.

With little guidance regulating product and process development, the space is frequently referred to as the wild west.3 Higher thresholds for efficacy, clinical utility, security, and overall system integration are needed, lest companies and their investors prioritize growth over quality.4

This presents a question of investor responsibility: While it perhaps benefits society if investor expertise is directing trends in ride sharing, food delivery, and social media, this expertise does not necessarily extend to mental health technologies. Indeed, subpar technologies can be inert at best or deleterious at worst. A few of these potential harmful effects may include:

- Mislabeling wellness as mental health. A wellness technology that advertises itself as mental health care could mislead a user into believing they are receiving clinical treatment and/or do not need to seek actual clinical treatment for their condition.

- Encouraging false user assumptions. An inert or subpar technology could deter a user from seeking mental health care in the future under the false assumption: it does not work for me.

- Providing a too-low dosage. A low-intensity mental health technology, such as text-based therapy, may fail to meet the user’s needs if a higher level of care is more appropriate.

- Complicating clinical workflows. A technology that is not elegantly streamlined into existing workflows with practitioner or healthcare system needs in mind can create undue complexity. Too many disparate point solutions that do not integrate with existing Electronic Health Records and IT systems can further fragment care and frustrate patients, families, administrators, and care teams. Ultimately, this may result in the technology being neglected or improperly used.

We do not wish to discourage investors or entrepreneurs, but instead seek to encourage all stakeholders to understand the massive opportunities and ethical dilemmas more clearly. The current state of affairs raises several questions: How can investors make the most ethical decisions with a layperson’s perspective on mental health care? And perhaps more urgently, if investors do not truly understand the mental health care system, are they making mental health care even more fragmented? By investing in companies that fragment mental health care instead of companies that improve the ecology of the system (connect care, reduce costs, and so on), investors may be unintentionally harming the space more than helping it.

What is most necessary, then, is the convergence and effective collaboration of mental health practitioners and investors.5 Now more than ever, there is a dire need to break down silos and converge practices from disparate fields to create valuable and responsible products and services.6 We recently published a book with Oxford University Press—Convergence Mental Health: A Transdisciplinary Approach to Innovation—which addresses these issues and offers a path forward. Several implementable solutions include:

-Involving mental health practitioners in due diligence teams

-Encouraging seats for mental health practitioners on advisory boards and in executive roles

-Conducting extensive consumer research with mental health practitioners as early users

-Partnering with research institutions, universities, or healthcare associations

While investors are currently bullish on mental health technologies, too many company failures and irresponsible solutions will cool investor confidence. This storyline played out over the past decade with climate venture investing, a vertical that similarly received a feverish flurry of attention from investors. A combination of market changes and overly optimistic investing left top tier venture firms, like Kleiner Perkins Green Fund, with dozens of investments that may never pay off, a scenario that might have unintentionally set back climate investing.7 However, with effective collaboration between investors and mental health practitioners, we could see increased investment trends, a plethora of new companies, and an unlocking of a huge amount of additional capital as the field matures. Indeed, there is now $40.5 trillion in global assets with environmental, social, and governance investment imperatives—a pool of capital that could be harnessed by the mental health field.8 This capital will be sorely needed if we are to curb the multi-trillion dollar cost mental illness inflicts upon our civilization. Further, there is a rise in special purpose acquisition company (aka blank check company) activity in digital health,9 and a higher-quality mental health technology sector could attract more of this new capital.

Though it is tempting to move quickly as the foreseeable gold rush of mental health innovation beckons, we must urge investors to begin with the end in mind: By prioritizing responsible investment, incubation, and acceleration of mental health technologies from the outset, mental health investors can sidestep many of the reckless mistakes made by healthcare counterparts. In the words of one of our authors, “You cannot ‘Elon Musk’ mental health innovation,” lest this tinderbox of potential become an explosion.

Jessica Carson is the Director of Innovation at a major mental health organization, Expert in Residence at Georgetown University, author of Wired This Way, and founder of The Magnum Opus Academy. Andy Dunn is the co-founder of Bonobos, the co-founder of Red Swan Ventures, and Chairman Emeritus of Blue Engine. Dr Noori is Chief Resident of Digital Psychiatry and Chief Resident of Quality Improvement at the Yale Department of Psychiatry, Yale University. Dr Eyre is president of PRODEO, co-founder of the PRODEO Institute, co-lead of the OECD Neuroscience-inspired Policy Initiative, president of PRODEO, adjunct associate professor with the Institute for Mental Health and Physical Health and Clinical Translation at Deakin University, instructor in brain health diplomacy and entrepreneurship at the Global Brain Health Institute (University of California, San Francisco and Trinity College Dublin).


1. Thorne J. Driven by pandemic demand, mental health startups surpass 2019 funding. PitchBook. October 14, 2020. Accessed May 11, 2021.

2. DeSilva J, Zweig M. 2020 market insights report: Chasing a new equilibrium. Rock Health. Accessed May 11, 2021.

3. Ruwaard J, Kok RN. Wild west: Time to hold our horses? The European Health Psychologist. 2015;17(1):45-49.

4. Mou D, Insel TR. Startups: Focus on innovations that truly improve mental health. Stat News. January 19, 2021. Accessed May 11, 2021.

5. Eyre HA, Berk M, Lavretsky H, Reynolds C, eds. Convergence Mental Health: A Transdisciplinary Approach to Innovation. Oxford University Press; 2021.

6. Eyre HA, Ellsworth W, Fu E, et al. (2020). Responsible innovation in technology for mental health care. Lancet Psychiatry. 2020;7(9):728-730.

7. McBride S, Groom N. Insight: How cleantech Tarnished Kleiner and VC star John Doerr. Reuters. January 16, 2013. Accessed May 11, 2021.

8. Baker S. Global ESG-DATA driven assets hit $40.5 trillion. July 2, 2020.

9. Shinkman R. SPAC-powered digital health deals rising dramatically. April 15, 2021.

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