Cyberstarts, a venture capital firm focused exclusively on early-stage cybersecurity companies, has launched a new $300m investment initiative designed to help startups retain key personnel and reward employees.
According to Security Week, the newly introduced fund, named the Employee Liquidity Fund, will allow employees at Cyberstarts-backed startups to sell a portion of their vested shares without having to exit their companies. The fund aims to improve long-term employee retention and ensure continued alignment of incentives within its portfolio.
Cyberstarts has built a strong reputation within the cybersecurity ecosystem, investing in companies at the earliest stages of growth. The firm has backed nearly 30 startups, including industry leaders such as Wiz, Fireblocks, Island, and Cyera.
The new $300m initiative is intended to provide liquidity to employees at eligible portfolio companies. Eligibility will depend on each startup’s scale and talent requirements, and the implementation will be led by their respective HR teams. Cyberstarts will allocate dedicated amounts from the fund to each company, offering flexibility in how the programme is rolled out.
The launch of the Employee Liquidity Fund marks a significant step in addressing the needs of employees in private startups, particularly as IPO timelines continue to extend. The initiative is expected to make a considerable impact across the firm’s portfolio.
Island co-founder and CEO Michael Fey said, “Especially given today’s extended IPO timeline, secondary equity transactions are becoming an essential component of the employee experience at startups that choose to remain private and independent. This new commitment from Cyberstarts is a tremendous asset as founders work to deliver an exceptional workplace.”
Cyera, a data security firm that recently secured a $540m Series E in June 2025 and has now raised over $1.3bn in total, also praised the move. Cyera co-founder and CEO Yotam Segev said, “At Cyera, we’re building a lasting company in a critical industry, which requires retaining and motivating the very best talent over a long time horizon. Cyberstarts has been supporting our mission from day one, and this new liquidity program supercharges our team by rewarding them with reliable and predictable liquidity.”
With the launch of this fund, Cyberstarts has now raised over $1bn in total capital commitments across six separate funds.
Cyberstarts founder Gili Raanan said, “With this new fund, we are hoping to go even further to support our portfolio companies – creating a retention tool that rewards employees with a way to participate in their company’s early success while staying focused on the long-term vision.”
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