Cyberstarts, long recognized as the powerhouse of early-stage cybersecurity venture investing, has taken a bold and strategic step to reinforce its portfolio companies’ talent foundations with the launch of a $300 million Employee Liquidity Fund. This move addresses one of the most pressing challenges facing high-growth startups in the current environment: how to retain top technical talent over extended periods, particularly as public market exits become increasingly distant.
The structure of the fund is intentionally progressive. Instead of waiting for an IPO or acquisition to unlock the value of their equity, employees at select Cyberstarts-backed companies will now have annual, structured windows to sell portions of their vested shares. These secondary transactions won’t require the employees to leave their roles—meaning they can continue contributing to the long-term success of the business while realizing some financial gains along the way. This shift reflects a maturing startup ecosystem, one in which compensation and incentives must evolve beyond traditional paradigms of deferred equity and speculative liquidity events.
Founders and CEOs across the Cyberstarts network have already welcomed the initiative. Yotam Segev of Cyera emphasized how vital such programs are for building enduring companies in critical sectors like cybersecurity, where domain expertise and institutional knowledge can’t easily be replaced. At Island, CEO Michael Fey described the program as a necessary evolution, particularly in a world where IPO timelines have stretched and private valuations remain high. In their view, these liquidity events are no longer luxuries but integral tools in cultivating a stable and motivated workforce.
The Employee Liquidity Fund is not a one-size-fits-all solution. Cyberstarts will work directly with each eligible company to determine the right structure, allocation, and timing based on individual company needs. Human Resources teams will implement these plans internally, ensuring alignment with the company’s stage of growth and operational strategy. This flexibility is what sets the fund apart—it’s not just capital, it’s capital deployed with precision and empathy toward what early employees need to stay invested, both financially and emotionally.
This initiative also underlines Cyberstarts’ distinctive approach to venture capital. More than a source of funding, the firm sees itself as a co-pilot to its startups, embedding itself from ideation to IPO. Founder Gili Raanan’s vision has always been centered on people first—recognizing that the best cybersecurity innovations come from small, elite teams of technologists who must be incentivized to stay the course. The new fund is a direct manifestation of that philosophy, converting early paper gains into tangible rewards while reinforcing a long-term mission.
The liquidity program arrives as Cyberstarts surpasses the $1 billion mark in total capital commitments across six funds, a remarkable feat given its specialized focus. With nearly 30 investments including standout names like Wiz, Fireblocks, Island, and Cyera, Cyberstarts has established itself as a builder of category-defining companies. The Employee Liquidity Fund now adds a new dimension to its value proposition—not just backing winners, but nurturing the people who build them.
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