The Risks of Working for VC-Backed Mental Health Companies — And What to Do Instead
Venture Capital (VC) investment in mental health is booming. On the surface, this may seem like progress: more funding, more access, more innovation. But for those working inside these systems—especially therapists and care providers—the reality is often far more troubling.
Why Venture Capital is Interested in Mental Health
Surging demand: Anxiety, depression, and other conditions are on the rise globally.
Scalability: Tech-based platforms grow quickly and cheaply—unlike traditional therapy.
Access gaps: Apps can reach underserved populations more efficiently.
Regulatory changes: Telehealth is now a legitimized, billable care model.
Predictable revenue: Subscription models attract investors.
Impact investing: VC frames itself as creating social good.
Measurement-Based Care (MBC): This model emphasizes cost-effectiveness, aligning with VC’s interest in high ROI.
So What’s the Problem?
VC-backed companies are still businesses. Their primary goal is profit, not people. Here's what that looks like in practice:
Care quality suffers: High caseloads, short sessions, and automated interventions replace therapeutic relationships.
Clinicians are exploited: Low pay, no negotiation power, poor support, and contractor misclassification are common.
Clients are misled: Lack of cost transparency and overbilling are widespread issues.
Data privacy is compromised: Many of these companies have been sued for illegally collecting or selling client data.
More control over driving down reimbursement rates: Big companies like this have the power to drive down insurance reimbursement rates. The more clinicians that join them, the more power they have.
Some Companies Under Scrutiny
Headway: Accused of misleading pricing, overcharging, selling data, and labor violations.
Cerebral: Faces lawsuits and skirts HIPAA by avoiding direct care responsibilities.
Alma: Charges therapists fees, overbills clients, lacks transparency.
Grow Therapy: Enforces oversight on independent contractors and has pricing complaints.
Rula: Accused of improper medical necessity reviews.
BetterHelp: Sold client data to third parties; many clients and therapists report negative experiences.
LifeStance: Sued for selling client info, lying to investors, labor violations, and retaliation.
What Can Clinicians Do Instead?
You are not powerless. If you're disillusioned with the VC-driven mental health landscape, consider:
Starting your own private practice.
Joining or forming a cooperative practice model with equitable ownership and decision-making.
Joining a local clinician-owned group practice with shared values.
Exploring insurance paneling independently to retain more control over your rates and care.
Following the work of advocacy organizations, such as the National Alliance of Mental Health Providers, for support and education.
A Final Thought
It’s understandable to seek tools that ease your burden—this work is hard, and VC companies often sell emotional relief. But at what cost? If you’ve felt uneasy, frustrated, or burned out in these settings, you’re not alone.
Choosing client-centered, clinician-led care models isn’t just a career move—it’s a stand for the future of mental health.