Cyberstarts, an early-stage venture capital firm specialising in cybersecurity, has launched a new $300m liquidity fund to support employee retention across its portfolio companies.
The newly launched Employee Liquidity Fund will allow startup employees to cash out part of their vested equity without having to leave their companies. The fund is designed to reward talent and improve long-term retention, particularly in cybersecurity firms where competition for skilled workers remains high.
According to Security Week, Cyberstarts is known for investing early in cybersecurity companies and supporting them through their growth. Its portfolio includes industry leaders such as Wiz, which is reportedly being acquired by Google, as well as Fireblocks, Island, and Cyera.
The $300m fund will be used to give startup employees a path to liquidity through secondary equity transactions, a mechanism that allows employees to sell shares before an IPO or acquisition. This move comes amid growing demand for equity cashout options as private companies delay public listings. Each portfolio company will receive a dedicated allocation from the fund, with eligibility and implementation to be managed internally by each HR team.
Cyberstarts said the initiative is a flexible tool to help companies align employee incentives and maintain team continuity, especially in today’s uncertain market for exits.
Island, a startup developing a secure enterprise browser, is one of the companies benefiting from the initiative. 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 company that recently raised a $540m Series E in June 2025 and has received over $1.3bn in total funding, echoed similar praise. Cyera co-founder and CEO Yotam Segev said, “In today’s market, we’re seeing industry-leading technology companies scale to extraordinary heights over years and years with continued drive and commitment of their original employees… this new liquidity program supercharges our team by rewarding them with reliable and predictable liquidity.”
The launch of the Employee Liquidity Fund brings Cyberstarts’ total committed capital across six funds to over $1bn.
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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