You're Ignoring the Wrong Problems in Your Business

Why 'Growth at All Costs' Is Killing Startups: Corazon Capital Co-Founder Steve Farsht On this episode of Ratchet Up, Allan Breidenbach sits down with Steve Farsht, co-founder of Corazon Capital, an early-stage venture fund based in Chicago. Steve shares hard-won lessons from 15+ years and 250-300 portfolio companies — from the danger of "growth at all costs" thinking, to why emotional intelligence matters more than analytical skill in venture investing, to how he evaluates founders before writing a check. They dig into the real difference between advice and influence, how stakeholder management (not the pitch deck) determines whether deals succeed, why boardrooms are the wrong place to resolve conflict, and Steve's candid take on where AI is headed for the investment industry and the broader knowledge economy. Topics covered: • The "five whys" habit Steve learned as an auditor • Why founder-fit matters more than the idea itself • Private equity vs. venture capital risk profiles • Managing 40 portfolio companies knowing most won't return capital • The emotional cost of founder relationships that don't work out • Preparing a business for a sale or exit • How AI is reshaping legal, accounting, and investing careers • Imposter syndrome and the advice Steve wishes he'd gotten at 25 Connect with Steve Farsht on LinkedIn. Chapters 0:00 Intro & welcome 0:44 Steve's first business lesson: the power of "five whys" 1:51 What is Corazon Capital? 2:19 How Steve evaluates founders with little data to go on 3:19 Ratchet Round: the belief Steve changed his mind about 4:45 Growth at all costs vs. prudent capital raising 6:30 Managing individual LPs and long time horizons 7:20 How Steve helps founders grow — advice vs. influence 9:43 The two-way mentor relationship with founders 10:17 Aligning stakeholders around an exit 12:28 Traits Steve looks for before backing a founder 13:42 Steve's hit rate across 250-300 investments 14:03 The hardest part of the job: losing founder relationships 15:21 Why emotional intelligence beats analytical skill 17:00 The "25-year-old with an MBA" problem 18:23 Red flags before raising capital 20:55 The mistake Steve won't make again 22:28 Why people defend the status quo 23:35 Poor communication as the #1 business killer 25:16 Why boardroom fights mean you already lost 26:57 Vetting new investors before they join the cap table 28:18 What Steve wishes he'd known at 25 (imposter syndrome) 29:29 When it's okay for a leader to say "I don't know" 30:00 AI's impact on legal, accounting, and knowledge work 34:02 Does AI create a lack of discipline? 35:16 How younger investors need to reinvent themselves 36:38 What Steve is excited about next 38:00 Lightning round: best advice, book recs, habits 41:43 Final thoughts: one word for the future 42:38 How to connect with Steve 📘 MENTIONED IN THIS EPISODE Ratchet Up by Allan Breidenbach 🎙️ ABOUT RATCHET UP Ratchet Up is a podcast about solving human problems to drive business performance, hosted by Allan Breidenbach. New episodes feature leaders across industries talking candidly about trust, engagement, and what actually moves a team forward.