In October 2024, New York-based Swell VC announced its second fund with $11.5 million in commitments. 

Co-founded by general partners Jay Patil and Rusty Ralston in 2011, the firm now manages two seed-stage funds and a special purpose vehicle with $19 million in assets.

Compared to larger firms, they’re small potatoes — but that’s intentional. Swell VC is all about being hands-on: helping founders with critical early hires and go-to-market strategies.

I invited them on Fund/Build/Scale to discuss their investment thesis, why diversity matters for building innovative teams, and how to know when it’s finally time to stop thinking about your startup idea and start building.

RUNTIME 42:09 EPISODE BREAKDOWN

(1:36) Rusty explains how he and Jay met.

(4:08) “ People determine the outcome of a company.”

(5:36) “ You start the search when you're ready to hire. And then you build momentum.”

(8:27) When Swell VC gets involved with founders, where they’re looking to invest.

(11:24) Jay talks about the firm’s portfolio strategy and its second fund.

(14:38) When it comes to early hiring, “ over the last 15 years, we've codified like all of our learnings.”

(17:16) Where do  founders make the most mistakes in the hiring/interview process? 

(21:43) “A  big blind spot is thinking diversity is just about hitting certain metrics.”

(23:15) “ We're all about finding founders to live on what we call ‘the edge of the inside.’”

(26:39) “ No solo founder can do everything forever.”

(29:14) “ You don't need to build a full team right away. Your network is kind of your first line.”

(31:55) Signals that indicate a founder’s ready to take the leap into entrepreneurship.

(34:40) Why Swell VC is looking for category-creating startups to invest in.

(37:34) Questions Jay and Rusty expect founders to ask during the discovery meeting.

(40:25) How they prefer to be pitched.

LINKS

• Jay Patil
• Rusty Ralston
• Swell VC
  • info@swell.vc
• Swell VC Closes $11.5M Fund II, Proving Small Funds Can Deliver Big Wins (PR Newswire)
• Distributed to Paid-In Capital (DPI) definition

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Thanks for listening!

– Walter.