Rick Holton: Venture Capitalist on failed deals, why corps can't innovate, & helping the imprisoned

About this episode

Rick Holton, a St. Louis-based venture capitalist and founding partner of FinTop Capital, walks through the unglamorous mechanics of institutional venture investing: why he built a FinTech-focused fund in the Midwest rather than the coasts, how VC firms actually spend their time (mostly portfolio management, not deal-picking), and the structural reason large corporations struggle to innovate — describing internal fixed-cost tech and ops groups as functioning like "a form of communism" with no incentive to move fast. He details liquidation preference and convertible debt mechanics using a plain-language "podcast fundraising" analogy, then narrates a detailed cautionary tale of a beverage startup (Nein/Cognizin) wiped out by bad debt terms and a rival's shelf-stocking sabotage at Walgreens. He explains his firm's "12 Angry Men" investment-committee process (any partner can veto, mission-driven founders preferred over money-driven ones) and the Gell-Mann amnesia effect as applied to evaluating pitches outside one's expertise. A contrarian-views segment covers his skepticism of full renewable-energy transition (concrete/carbon footprint of wind turbines, grid capacity for EV charging) and coal's "cancel culture" collapse in St. Louis, a former coal hub. The episode closes on Concordance Academy, a recidivism-reduction nonprofit Holton supports — framing prison recidivism (97% within five years, $103K/year cost per prisoner) as a "trillion-dollar problem" rooted in family breakdown and chemical dependency, tying back to Crowe's closing reference to Larry Sharp's "for every unit of government you put in, you take away a unit of community."

“Within a large organization... there's a form of communism that goes on... there's no incentive to work harder. It's really risk mitigation as opposed to driving forward the business.”

“You might be selling 10% of the business, but it's not really because the cash comes out... a founder where you thought you had 40% of your business, they took all the cash.”

“You can have a bad deal with good people, but you cannot have a good deal with bad people... if you're not mission driven... that's not the right reason to be doing what you're doing.”

Key moments

• ~11-16%: Why large corporations can't innovate — internal ops/tech groups behave like fixed-cost monopolies ("a form of communism").
• ~27-36%: Liquidation preference and convertible debt explained via a plain-language startup-funding analogy.
• ~31-37%: The Nein/Cognizin beverage-startup collapse — bad debt terms plus a rival's shelf-sabotage at Walgreens.
• ~38-42%: The "12 Angry Men" investment-committee veto process; "bad deal with good people" vs. "good deal with bad people."
• ~44-52%: Gell-Mann amnesia effect applied to evaluating unfamiliar-domain pitches at angel investor meetings.
• ~74-80%: Contrarian energy views — wind-turbine carbon footprint, grid capacity limits for EV adoption, coal's "cancel culture" collapse.
• ~86-97%: Concordance Academy and the economics of prison recidivism as a "trillion-dollar" social and financial problem.

Notable quotes

“Within a large organization there's a form of communism that goes on... it's really risk mitigation as opposed to driving forward the business.”

“It costs us taxpayers $103,000 a year to incarcerate a prisoner... 97% of them go back to prison within five years. You're just recycling prisoners.”

“The math doesn't work on being a hundred percent renewable... the carbon footprint of a windmill is not good, and no one's talking about that.”

“You've got to have all this knowledge... [about] whether it's a good deal or not.”