Ex-Secret Service Agent Is Raising a Second Cybersecurity Fund
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Venture investors rarely say out loud that they plan for acquisitions rather than IPOs. Stephen Ward of Brightmind Partners does, and he is now raising a second cybersecurity fund of roughly the size of his first.
A fund built on early sales
Ward's line is that founders have to sell on the way up. He co-founded the two-year-old New York fund with Gur Talpaz, and the debut fund closed late last year at $250 million. Its proof point is SGNL, an identity security startup. Brightmind led its Series A, and 11 months later, in January, CrowdStrike agreed to pay $740 million for it.
The first fund has made 14 investments and has one exit so far, the SGNL sale. Some investors asked why Brightmind did not hold that bet longer. Ward says the best time to sell a cybersecurity startup falls somewhere in years three to seven. His team keeps a log of security deals and of where buyers prefer building to buying.
Going on alone
Talpaz left in April, and another early colleague went with him, which makes Ward the sole general partner. Asked why, Ward cited differences in opinions about operations and the firm's future. Talpaz and Tayler Sipperly then co-founded a new firm called Cognition in August with CrowdStrike global CTO Elia Zaitsev. It is reportedly targeting a $170 million first fund. Sipperly says they continue to support Brightmind's portfolio companies and remain on several boards.
From the Coast Guard to venture
Ward served four years in Coast Guard search and rescue, then studied criminal justice at Seton Hall and joined the Secret Service after graduating in 1998. Stationed in New York, he arrested a hacker tied to a very large card-data theft and turned him into an informant. The hacker kept hacking, and after being caught again he claimed Ward was in on it. Ward spent about 18 months clearing his name. The hacker received a 20-year sentence, and Audible made the story into a podcast, "Operation Firewall".
He then worked at J.P. Morgan, was CISO at TIAA for six years and at Home Depot for two. After quitting in 2021, he joined Insight Partners. At 49 he left to start Brightmind, with fewer than 20 limited partners filling the first fund.
A hot market for early-stage security
PitchBook counts $4.7 billion in seed-through-Series B cybersecurity deals through September, ahead of all of 2025, though deals fell to 248 from 358. Early-stage startups now raise more than later-stage rivals, a first in over ten years. The average seed round rose to $8.4 million from $5.54 million.
Ward doubts how much goes to AI security. PitchBook bucketed 278 deals in the first half of 2026 that way, but his team went through them by hand and counted only 30 that truly were. The second fund will put about 20% into AI infrastructure, and about 40% of the debut fund's startups are in Tel Aviv. He says he is not going to celebrate until the fund returns a "3x net fund".
Source: TechCrunch