Startups obsess over cash burn. Founders track payroll, ad spend, and runway down to the week. But very few account for a quieter drain that can empty the tank just as fast: toxic culture.
Dr. Melissa Robinson-Winemiller has studied toxic culture across corporate, nonprofit, and academic settings. She has also lived it. “A truly toxic workplace isn’t just a bad day,” she says. “It’s a cycle that eats away at people until they are just trying to survive. I remember wishing I would get in a car wreck on the way to work so I didn’t have to go in. That’s how severe it was.”
What Toxic Culture Really Means
The word toxic gets thrown around too easily. A single tough meeting is not the same as working day after day in an environment that slowly drains people. Real toxicity is repeated over time. It creates mental health struggles, PTSD, or unhealthy coping behaviors. Employees start doing whatever it takes to make it through another shift.
Often, it is not one single cause. Cliques form. Bullying is tolerated. Narcissistic leadership puts people down. Incivility becomes normal. Over time, employees either lash out or retreat into silence. Morale falls and turnover rises. What feels like a personality clash is often the early stage of an organizational problem that slows everything down.
Trust is the clearest signal. “Trust is built when words and actions align,” Robinson-Winemiller explains. “If leaders claim to value empathy but act without it, employees see through it. They lose respect. Morale drops. And eventually people leave.”
The Cost to Startups
Investors will never see “culture burn” on a spreadsheet, but it shows up in execution. Decisions drag out because people hesitate to speak. New hires leave before they add value. Founders spend their energy backfilling instead of building. The company pays for toxicity just as surely as it pays for AWS or rent.
Robinson-Winemiller compares it to planting a seed in hard dirt with no water. It may sprout for a time, but it will never flourish. Left too long, it wilts beyond recovery. Employees are no different. They can survive, but they cannot thrive in a toxic culture.
And the damage is not limited to the office. People carry the stress home. Relationships strain, health declines, and creativity fades. What looks like poor productivity on the surface often starts with invisible cultural rot.
A Personal Turning Point
Robinson-Winemiller speaks from more than research. Her own career in academia ended after an assault by a colleague and years of leadership failures that made the environment unbearable. She left a field she had spent decades building.
The experience made her pay attention. When she later consulted with startups and nonprofits, she saw the same behaviors appear again and again. Even when the culture was not fully toxic, the absence of empathy limited what people could accomplish. Leadership sets the tone, for better or worse.
Spotting Red Flags Early
In her book, The Empathic Leader, Robinson-Winemiller compares unhealthy leadership to dating. Beige flags are warning signs that may develop into bigger problems. Red flags signal it is time to leave if you can.
For founders, this means looking past the culture deck to what employees actually live each day. Watch for interview panels where people look exhausted or one person dominates the room. Pay attention when leaders say the right words but make decisions that contradict them. Culture is not what is written in a mission statement. It is what people do when nobody is watching.
What Employees Can Do
Not everyone can leave a toxic environment right away. Robinson-Winemiller admits she stayed almost seven years in one. Her advice is direct. If you can get out, do it. If you cannot, put up boundaries. Remember that empathy does not mean lack of limits. Protect your identity and rebuild yourself outside of work so you do not lose who you are. And study the patterns of behavior. Even if you cannot avoid them completely, understanding how toxicity works gives you more control.
A Founder’s Responsibility
For founders, the message is urgent. A toxic culture is not just unpleasant. It is expensive. Teams stuck in survival mode cannot innovate. They will not move fast enough to satisfy investors. They will not deliver the creativity needed to compete.
Perks do not solve it. Free lunch does not solve it. What matters is whether leadership actions back up their words. A founder who repairs broken trust, sets clear expectations, and listens with genuine empathy creates an environment where people can move quickly and confidently. That trust becomes a competitive advantage.
The Final Word
Startups collapse when burn rate outruns runway. Founders know this. But the hidden burn rate of culture is just as real. You cannot raise another round to cover it.
“Truly toxic environments will not get better because leaders are rewarded by the system they created,” Robinson-Winemiller warns. “The only real solution is to stop building them in the first place.”
Cash burn is visible. Culture burn is not. Ignore it, and you will run out of both.
Spencer Hulse is the Editorial Director at Grit Daily. He is responsible for overseeing other editors and writers, day-to-day operations, and covering breaking news.