// TECHCRUNCH — MOBILE & WEB
The ex-Secret Service agent who flipped a hacker is now raising a second $250M cybersecurity fund
Every time venture capitalists write a check, they’re secretly running numbers in their heads about different exit scenarios. It’s their job as fiduciaries. But nearly all will tell you (publicly, anyway) that every portfolio company is headed for an IPO.
Stephen Ward, the co-founder of Brightmind Partners, a two-year-old cybersecurity fund in New York, says otherwise outright. “You have to sell on the way up,” he says.
Ward’s unvarnished pragmatism is one reason he stands out. Another is the size of his firm’s debut fund late last year: a whopping $250 million fund, which he closed with co-founder Gur Talpaz. A third reason is his resume, which includes a stint with the Coast Guard, nine years in the Secret Service, and CISO jobs at TIAA and Home Depot before he ever thought about investing.
One proof point that suggests the combination is working is SGNL, the identity security startup CrowdStrike agreed in January to buy for $740 million, 11 months after Brightmind led its Series A.
Now, Ward is raising a second fund, targeting roughly the same size as the first one. This time, though, he’ll be doing it without Talpaz, who left in April along with another early colleague, leaving Ward as the firm’s sole general partner. He’s betting on himself at a moment when early-stage cybersecurity startups are raising more money than later-stage rivals for the first time in more than a decade.
His unemotional approach to exits traces back to an unlikely career. Ward says he grew up in northwest New Jersey between two farms, in a family that couldn’t afford college for his older brothers. After high school, he joined the Coast Guard, inspired by a commercial of a man jumping out of a helicopter, though he says he barely knew how to swim at the time. He spent four years in search and rescue.
Afterward, he studied criminal justice at Seton Hall in New Jersey and thought half-heartedly about law school. “I didn’t know what I wanted to do,” Ward told me last week over Zoom, wearing a pale hooded sweatshirt and looking more like a basketball coach than a venture capitalist. “I was kind of lost. I missed the military and the camaraderie and all of that.”
After graduating in 1998, he says, he mailed out some 300 resumes but no one responded. A Seton Hall professor who was also a chaplain to Secret Service personnel, as well as to members of the FBI and CIA, began introducing him around, and the Secret Service called first.
The Secret Service has two primary missions: protecting people and investigating financial crimes. Ward gravitated to investigations, then to “cyber” after the September 11 attacks in 2001. That year, he married a former college classmate, an American-born Syrian Muslim. Colleagues warned him the background check would be “miserable.” (They’re still happily married.)
What came next took Ward’s life down an unexpected path. Stationed in New York, he arrested a hacker who’d pulled off the largest credit card data theft of that era. Instead of charging him, however, Ward flipped him, turning him into an informant and running him for about three years. But the hacker kept hacking behind Ward’s back, and after he was caught again, he told the agency, as a diversionary tactic, that Ward was in on it.