Fund/Build/Scale

In this episode of Fund/Build/Scale, I talked with YL Ventures Partner Andy Ellis (a former CISO) about his approach to storytelling, tactics for founder-led sales and marketing, and why he thinks the cybersecurity hiring challenge isn’t a talent shortage, but a market misunderstanding. We also discussed refining product-market fit, customer discovery methods and pitfalls like believing in one's own narrative too strongly. The conversation also touched on hiring strategies, managing design partnerships, and maintaining humility as a founder. “The basic entry level skill of reading the room is knowing when somebody already agrees with you,” said Andy. RUNTIME 44:15 EPISODE BREAKDOWN (1:44) Andy describes his day-to-day work at YL Ventures with founders. (4:08)  "It's like you now have an infant, and your only job as a parent is to create a competent adult.” (6:33) How he prefers to be pitched. (7:52)  ”The art of storytelling is taking a message and putting it in a narrative vehicle.” (14:38) The biggest storytelling mistakes early-stage founders make. (17:08) “ The basic entry level skill of reading the room is knowing when somebody already agrees with you.” (18:50) “ Fear is a hard, hard sale… It's so transparent and CISOs do this every day.” (19:36) Common cybersecurity GTM missteps. (21:40)  ”The moment that you can sell the same product to two different companies, you should have a sales rep.” (23:45) How Andy helps founders read the room when they’re trying to make a sale. (27:20) “ You're hiring really out of a very different pool when you're in the cybersecurity space.” (29:08) “ Stealth is sort of a misnomer, but we're still sort of stuck in it.” (30:54) What to say if you want someone to quit their cushy job and join your risky startup. (32:46)  Rock-star hires are “fantastic if they stumble into your lap, but you can't go look for them.” (35:08) “ That first marketer you hire needs to be able to do a lot of things.” (39:05) “People with massive egos have a lot of humility.” (41:20) Trends in cybersecurity and AI he’s excited about in 2025. LINKS Andy Ellis 1% Leadership: Master the Small, Daily Improvements that Set Great Leaders Apart csoandy.com YL Ventures YL Ventures’ The State of the Cyber Nation 2024 (PDF) SUBSCRIBE TO FUND/BUILD/SCALE LinkedIn Substack Instagram Thanks for listening! – Walter.

Two of the three co-founders of Operant AI — CTO Dr. Priyanka Tembey and CMO Ashley Roof — joined me to talk about building the first runtime application protection platform and navigating the challenges of cloud-native security. The company announced a $10M Series A in September 2024 — In October, we discussed taking the leap into entrepreneurship, the lessons they learned through customer discovery and education, making early hires count, and the importance of early-stage team dynamics. RUNTIME: 48:14 EPISODE BREAKDOWN (2:28) “ I think it was within six months that we were able to have our first customer conversation.” (3:46) What can customers do with a runtime application protection platform? (9:38) “ What is interesting about our team is we don't come from prior security vendor companies.” (12:59) Ashley explains how her first “real job” at Google eventually led her to Operant AI. (15:51) “ I had many years of imposter syndrome to get over.” (17:57) Why working with design partner teams is key, particularly for stealth startups. (20:43) Priyanka discusses the company’s early customer education efforts. (24:23) Ashley on why previous runtime application protection products hit “the trough of despair pretty fast.” (28:26) Turning design partners into paying customers was part of their seed-to-Series A transition. (31:04) Priyanka explains how Operant AI runs proof-of-concept programs for customers. (34:28) Why they decided to start up in stealth. (36:29) “ I honestly don't know how any consumer company could possibly start in stealth.” (38:35) “ We have the technical leadership in place now… to scale the product further.” (41:02) Inside their recruiting strategy and process. (44:35) What’s changed since closing the Series A? LINKS Operant AI Dr. Priyanka Tembey co-founder, CTO Ashley Roof, co-founder, CMO Operant AI Secures $10M Series A to Protect the Modern Cloud Across APIs, Applications and AI SOC 2 compliance SUBSCRIBE LinkedIn Substack Instagram Thanks for listening! – Walter.

Startups are built on grit, vision, and — surprisingly — a lot of peer advice. In this episode, I sat down with Mallory Contois, Head of Community at Mercury and leader of Mercury Raise, their founder success platform. Drawing from their latest survey, Mallory shares eye-opening insights about how early-stage entrepreneurs navigate challenges like fundraising, hiring, and customer acquisition. Why do founders rely more on peer networks and podcasts like this one than their VCs for operational advice? Mallory explains the unique psychology that makes it hard for founders to admit uncertainty to their investors and why angel investors often provide more operational value than institutional funds. We also discuss key survey findings, including the evolving AI landscape, the benefits of accelerators, and how lean teams are reshaping what’s possible in a startup.  Whether you’re building your first company or gearing up for the next funding round, this episode offers actionable insights and a fresh take on founder dynamics in today’s startup ecosystem. Subscribe now to Fund/Build/Scale and learn how to turn your idea into a sustainable business. RUNTIME: 44:44 EPISODE BREAKDOWN (2:19) A brief overview of Mercury and Mercury Raise. (3:42) Mallory describes a day in the life of Mercury’s Community team. (6:18) Do mature startups worry about the same things as seed-stage teams? (8:41) “ We have a pretty good pulse on what people are talking about and what people are struggling with.” (9:26) Nearly a quarter of all survey respondents applied to accelerators but were rejected. (11:05) Why founders are more likely to get advice from this podcast than their VCs. (13:39) “ The peer connection that founders have is almost trauma bonding.” (15:02) “ We're seeing founders and investors giving the advice to be much more constrained in spend management.” (17:43) Mallory describes different founder archetypes who are attracted to Mercury Raise. (21:07) “ AI investments now are a lot more calculated than they were in the last couple of years.” (24:45) For AI founders, building in a hype cycle “ can be simultaneously demoralizing and exciting.” (27:17) How Mercury Raise creates value through community. (29:54) Mercury’s Investor Connect program helps founders sharpen pitches. (32:54) “Fundraising in general is just a black box.” (36:13) Vibe check: “solo founders are actually becoming a little bit more common and a little bit more accepted.” (37:19)  ”Co-founder breakups — it's worse than the real thing.” (38:02) Mallory’s advice for founders who are planning to fundraise in 2025. LINKS Mallory Contois Mercury Mercury Raise Mercury Investor Connect SUBSCRIBE 📓Substack: https://fundbuildscale.substack.com 📸 Instagram: https://www.instagram.com/fundbuildscale/ 📥 LinkedIn:https://www.linkedin.com/newsletters/7249143254363856897/ Thanks for listening! – Walter.

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 [email protected] Swell VC Closes $11.5M Fund II, Proving Small Funds Can Deliver Big Wins (PR Newswire) Distributed to Paid-In Capital (DPI) definition SUBSCRIBE 📥 LinkedIn: https://www.linkedin.com/newsletters/7249143254363856897/ 📓 Substack: https://fundbuildscale.substack.com 📸 Instagram: https://www.instagram.com/fundbuildscale/   Thanks for listening! – Walter.