Rusty Ralston and Jay Patil on Unlocking Startup Success With a People-First Approach
On this episode of Redefining Work, I’m joined by Rusty Ralston and Jay Patil, co-founders of Swell Venture Capital. Rusty and Jay dive deep into the world of early-stage venture capital, sharing how their unique approach to assessing founders and building world-class teams has set them apart. With backgrounds in HR tech and talent assessment, they have developed a distinct methodology for identifying startup talent and scaling successful ventures.
Rusty and Jay recognize the critical role of people in driving startup success. The startup team is a huge factor in their investment decisions. “We saw firsthand how the right people could overcome seemingly insurmountable challenges,” Jay says, emphasizing the firm’s people-first investment philosophy.
During our conversation, Rusty and Jay explain why they believe talent is the key to unlocking a startup’s potential. They offer insights into their hands-on approach to recruiting, which gives them an edge in the competitive venture capital landscape.
Listen in as we explore how Swell VC is redefining venture capital through a talent-focused lens.
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Founders Are the Key to Transforming Markets
At the core of Swell’s investment thesis is a deep commitment to backing visionary founders who are transforming industries. Rusty and Jay don’t just invest in good ideas — they invest in the people behind them. “We want ideas and products that fundamentally transform how an industry operates,” Rusty explains. They seek founders who demonstrate a “maniacal customer focus” and have proven track records of commercializing innovative products.
A critical aspect of their strategy is diving deep into founders’ origin stories and assessing their ability to attract top-tier talent. “People are the ultimate differentiator when it comes to startups,” Jay says. “It is the single most important variable in the trajectory of a company.” They use their expertise to evaluate not only the founder’s vision but also their ability to inspire and lead a team capable of turning that vision into reality.
Recruiting the Right People Is a Top Priority
Getting the right people is a strategic priority for Rusty and Jay, and they don’t hesitate to put real resources into recruitment. One of Swell’s greatest strengths is its active involvement in helping founders secure key hires. Rusty and Jay don’t view recruitment as just an HR task; instead, they approach it as a sales process — one in which they are personally involved for their portfolio companies.
“We’re using the network we’ve built over the past decade and the skills we’ve refined to find exceptional people for the most important roles,” Rusty explains. “We work side by side with founders to achieve this.” Swell collaborates closely with founders to source, evaluate, and hire top candidates.
This hands-on recruitment approach sets them apart from other venture capital firms. "No other VC firm has two general partners who personally recruit for their portfolio companies like we do," Rusty highlights. By leveraging their vast networks and expertise, they help startups secure top-tier talent — the elusive "top 1%.” Jay adds that they've developed a detailed playbook to guide founders through this process. “We teach founders to approach hiring top 1% talent with the same level of focus and intensity they'd use to close a multi-million-dollar enterprise deal," he says.
Expertise on the ‘Edge of the Inside’ Is Transformative
In assessing potential investments, Swell VC looks for founders with deep domain expertise who have an “insider’s edge” on the problems they’re solving. This focus enables Swell to back companies that aren’t just improving on existing solutions but creating entirely new markets. Rusty explains, “Problems that they’re tackling tend to be hidden in plain sight. [We] call it the edge of the inside,” Rusty says. “You see it from the inside. You don’t really see it from the outside … It’s on that edge where you can really look at a market from an outside perspective to solve something.”
The co-founders also emphasize that humility is key to a founder’s success. “The biggest red flag that we look for is, or that is obviously noticeable, is a lack of self-awareness and a big ego,” Rusty says. Founders who surround themselves with people smarter than themselves are the ones who build sustainable companies.
Rusty and Jay have built Swell VC on the foundation of identifying exceptional founders and empowering them with the right talent. Their philosophy is simple yet powerful: startups win with people.
“The best founders know that it’s all about people,” Jay says. “They have a vision, they have a strategy, but it’s all about execution — and it takes really capable, really smart, really driven, highly motivated individuals to align with you on a vision and actually execute on that.”