Rusty Ralston and Jay Patil of Swell VC: A Hands-on Approach to Building Startups

Dec 17, 2024

Guest

Jay Patil

Guest

Rusty Ralston

Rusty Ralston and Jay Patil, co-founders of Swell VC, share insights from their hands-on approach to supporting startups. They emphasize the crucial role of diversity in building innovative teams, moving beyond mere metrics to include varied perspectives. Rusty highlights common hiring mistakes founders make, while Jay introduces their Swell Sync Playbook for effective recruiting. They also discuss the signs that indicate a founder's readiness to commit to entrepreneurship, underscoring the importance of passion and real user engagement.

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ANECDOTE

Founders' Origin Story

Jay Patil and Rusty Ralston met about 15 years ago as early employees at an AI startup in New York.
Their collaboration there eventually led to founding Swell VC to help founders build teams.

INSIGHT

People Drive Startup Success

The success of startups depends primarily on the quality of their people, not just the idea.
Strong teams are crucial to execute ideas and win markets.

ADVICE

Treat Hiring Like Sales

Start your hiring search only when you are ready, then build momentum with consistent candidate engagement.
Treat hiring like a disciplined sales process to find top talent effectively.

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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

📥 LinkedIn: https://www.linkedin.com/newsletters/7249143254363856897/

📓 Substack: https://fundbuildscale.substack.com

📸 Instagram: https://www.instagram.com/fundbuildscale/

Thanks for listening!

– Walter.