perspective

How Venture Capital Is Ruining Modern Therapy

Shayan Salar, LCSW, LCADC · 9 min read

Over the past decade, billions of dollars in venture capital and private equity have poured into mental health. On paper, that sounds like good news — more money, more access, more innovation. In practice, the money has come with strings, and those strings are quietly reshaping what therapy is. I say this as someone who believes deeply in this work and has watched the field change: the problem isn't technology, and it isn't online therapy. It's the financial model that now sits underneath so much of it.

Here's the core tension. Venture capital exists to turn one dollar into ten, fast, and then exit through an acquisition or IPO. That requires growth at scale. But therapy is slow, relational, and stubbornly human. The very things that make it work — time, trust, privacy, continuity, and a clinician's independent judgment — are exactly the things that get in the way of scaling. When care collides with that math, care usually loses.

The incentive problem

Most of the harms below aren't the result of bad people; they're the predictable result of a business model. When a company takes venture money, it makes a promise: we will grow aggressively and deliver outsized returns. From that moment, every decision is filtered through growth and margin. How do we acquire users more cheaply? How do we see more clients per clinician? How do we monetize what we have? None of those questions start with “what does this person actually need to heal?”

That misalignment is the root of everything else. A practice accountable to clients optimizes for outcomes. A company accountable to investors optimizes for growth. They are not the same goal, and over time the difference shows up in the room.

Your private moments become the product

Therapy depends on confidentiality. You can only do the work if you trust that what you say stays between you and your clinician. But when a platform's growth depends on advertising and data, your most intimate disclosures become marketing signals. The clearest example: in 2023, the Federal Trade Commission ordered BetterHelp to pay $7.8 million and banned it from sharing consumers' sensitive health data for advertising, after finding it had shared users' email addresses, IP addresses, and mental-health questionnaire answers with companies like Facebook and Snapchat for ad targeting.

Think about what that means. People came for help with depression, anxiety, and trauma — and information about that became fuel for an ad engine. That's not a glitch; it's what happens when the business model and the clinical mission point in opposite directions.

When therapy is free or unusually cheap and ad-supported, you are often not the customer. You're the product being sold to someone else.

Care gets compressed and gamified

Scale rewards speed, so venture-backed care tends to get shorter, more standardized, and measured by the wrong metrics. The most visible cautionary tale is Cerebral, which drew a federal investigation into its prescribing of controlled substances; former clinicians described feeling pressured to prescribe stimulants like Adderall after brief evaluations, with internal targets attached. The company later agreed to pay the government millions to resolve allegations about its business practices.

Even where nothing illegal happens, the logic is the same: clinicians get productivity dashboards, session lengths shrink, and the work is nudged toward whatever is fastest to deliver and easiest to bill. Therapy becomes a throughput problem to optimize rather than a relationship to tend.

Therapists become gig workers

To keep costs down and margins up, many platforms treat clinicians like interchangeable contractors: low per-session pay, high caseloads, little stability, and algorithms that match and reassign clients. The result is high therapist turnover — and turnover is not a minor inconvenience in this field. The relationship between client and therapist is the single most reliable predictor of whether therapy helps. When your therapist churns out and you're reassigned to a stranger every few months, the active ingredient of the whole enterprise is being quietly thrown away.

It's also a recipe for burnout. Good clinicians leave these environments precisely because they can't practice the way their training and ethics demand, which further degrades the quality of who's left to deliver care at scale.

The illusion of access

Defenders point to access, and it's their strongest argument — more on that below. But it's worth being precise. Matching millions of people to a therapist quickly is not the same as delivering care that works. If people cycle through clinicians, get rushed evaluations, or receive a thin, metrics-driven version of therapy, then what's expanded is access to a weaker product, marketed with the language of wellness. Convenience is real and valuable; it just isn't automatically the same thing as care.

Private equity and the roll-up

Venture capital isn't the only culprit. Private-equity firms have spent the last several years buying up group practices and mental-health companies and consolidating them. Consolidation isn't inherently bad, but the PE playbook is well known: increase volume, standardize the offering, raise fees where possible, and reduce clinician compensation to widen margins before a sale. Each of those levers, pulled hard enough, changes the experience of the person sitting across from a therapist — usually not for the better.

Why this matters clinically

Therapy works through conditions that money can't manufacture and tends to erode: a trusted relationship sustained over time, genuine safety, real confidentiality, and a clinician free to exercise judgment in your interest rather than the company's. The venture model doesn't usually attack these things openly. It just selects against them, quietly, because they don't scale. The damage is cumulative and easy to miss until you notice that the thing called “therapy” has been hollowed out from the inside.

The nuance: what the other side gets right

To be fair, the picture isn't all bleak, and I don't think anyone who works at these companies is a villain. Venture-backed telehealth has genuinely reached people who would otherwise have gone without care — people in rural areas, people who can't take time off work, people priced out of traditional therapy, and people for whom the privacy of a screen lowered the bar to reaching out at all. Telehealth itself is evidence-based and, done well, every bit as effective as in-person work. Some clinicians value the flexibility these platforms offer, and not every venture-funded company behaves the same way.

So the honest version of this critique isn't “apps bad, offices good.” It's that the financial model — not the medium — is the problem, and that the same capital that expanded access has also introduced incentives that work against the heart of the work. Both things are true at once. The goal isn't to romanticize the old system, which had its own access failures, but to be clear-eyed about what we trade away when therapy is built to be sold.

What to look for as a client

You have more leverage than it feels like. A few questions cut through the marketing: Who actually owns this practice, and who are they accountable to? How are the therapists paid, and will I keep the same one? Is my data sold or shared, and is the service HIPAA-covered? Is the length and frequency of my care driven by clinical judgment or by a metric? In general, independent, clinician-owned practices, transparent privacy practices, and continuity of care are worth prioritizing — even when a venture-backed option is cheaper or faster to start.

How I think about this

It's part of why I built an independent, solo practice the way I did. You see the same therapist every time. Your information isn't a product. Your care isn't rationed by a dashboard, and the pace is set by what the work actually requires — which fits the rest of how I practice: harm reduction, trauma-informed, and relationship-first. None of that scales the way investors like. That's rather the point.

Frequently Asked Questions

Are apps like BetterHelp or Talkspace bad?

Not categorically, and many people have had helpful experiences on them. The concern is structural: when a platform is built to grow fast and return money to investors, the incentives can work against continuity, privacy, and clinical depth. In 2023 the FTC ordered BetterHelp to pay $7.8 million and barred it from sharing users' sensitive health data for advertising, which illustrates how those incentives can play out.

Is online therapy itself the problem?

No. Telehealth is effective and has genuinely expanded access. The problem isn't the technology or seeing a therapist over video — it's the venture-capital and private-equity financial model layered on top of it, and the incentives that model creates.

How do I know if my therapy platform sells or shares my data?

Read the privacy policy for words like 'advertising,' 'partners,' 'analytics,' and 'third parties,' and look at whether the service is HIPAA-covered. If the product is free or unusually cheap and ad-supported, your data is more likely part of the business model. When in doubt, ask directly how your information is used.

What's the difference between venture-backed therapy and an independent practice?

A venture-backed company answers to investors who expect rapid growth and a profitable exit, which tends to push toward scale, metrics, and turnover. An independent, clinician-owned practice answers to its clients. That usually means you keep the same therapist, your data isn't a product, and the pace of care is set clinically rather than by a dashboard.

Does private equity really own therapy practices now?

Increasingly, yes. Over the past decade, private-equity firms have been buying and consolidating group practices and mental-health companies. Consolidation isn't automatically harmful, but it often brings pressure to raise volume, standardize care, and cut clinician pay — all of which can affect the people in the room.

Is venture-backed therapy cheaper, and is it worth it?

Sometimes it's cheaper or faster to start, which is a real benefit for people who can't otherwise access care. But lower cost can come with trade-offs in continuity, privacy, and depth. Cheaper access to a thinner version of therapy isn't always the same as getting the care you actually need.

How can I find an independent therapist?

Look for clinician-owned practices, directories like Psychology Today, and providers who are transparent about how they work, how they're paid, and how they handle your information. Continuity — keeping the same therapist over time — is worth prioritizing.