YL Ventures puts the buyer in the room

In March 2021, YL Ventures did something that can look peculiar in venture capital. One of its investments, Axonius, had become a unicorn. The company was still private. There was presumably more growing to do. YL sold its entire stake for $270 million. It had invested $25 million. The interesting question is why an investor would leave a party just as everybody else was arriving.

To understand that decision, start with the business YL actually runs. It helps small technical teams become companies that American enterprises will buy from. Writing a check gets the relationship started. The harder work is translating an ingenious security idea into a purchase someone can defend to a boss.

Before the pitch, meet the buyer

A cybersecurity founder can understand an attack beautifully and misunderstand a purchasing department completely. The buyer has existing tools, staffing limits, integration headaches and a budget. Another dashboard may solve a technical problem while adding an operational one. Getting those objections early changes what a startup builds.

YL puts that conversation near the beginning. Its venture advisory board includes more than 100 security professionals, according to its 2024 CISO report. Founders can test assumptions with people responsible for security inside large organizations. Advisors get an early look at emerging technology. Both sides have a reason to return.

“You can wait for the right solutions to show up, or you can help build them.”

Doug Graham, CISO & Trust Officer at Lionbridge, on advising through YL

The practical work extends to positioning, sales processes, executive recruiting and subsequent financing. Grip Security’s Lior Yaari credits YL with sharpening messaging for enterprise security teams. Hush Security’s Micha Rave describes help getting its earliest sales pipeline moving. These are founder testimonials, but their specificity matters: introductions are useful when they produce better decisions and actual commercial conversations.

A venture firm learned in a classroom

The origin has a pleasingly academic detail. In 2002, Yoav Leitersdorf met John Quigley at Columbia University, where Quigley taught venture investing. Quigley had managed Princeton’s alternative assets. Leitersdorf had built and sold three startups. The two eventually cofounded YL Ventures in 2007, combining an operator’s experience with an allocator’s understanding of funds.

Its earliest remit was broader than cybersecurity. A 2007 interview discussed European opportunities and its investment in web analytics company ClickTale. Today the focus is exclusively cyber, with Israeli founders at its center. That narrower brief makes the buyer network reusable: a relationship developed around one security problem can inform the next investment.

YL sits among specialist investors such as Cyberstarts, Glilot and Team8. Its particular proposition combines early capital with a US commercial bridge. Founders receive investment and company-building support; limited partners supply the fund capital and seek investment returns. Portfolio companies sell the security software. Keeping those roles separate helps explain the firm’s economics.

The arithmetic of leaving early

Axonius began with a wonderfully unglamorous problem: organizations struggle to know what devices and assets they have. YL put $3 million into the 2017 seed round and continued investing. By the time it sold, the total outlay had reached $25 million. The buyers were investors equipped for a later chapter, including ICONIQ, Alkeon, DTCP and Harmony Partners.

The sale crystallized a return while the company continued independently. It also released YL’s attention for younger businesses. That is a useful distinction for anyone copying the playbook: an investor’s appropriate holding period and a company’s remaining opportunity need not be identical. Axonius itself reported passing $200 million in annual recurring revenue in May 2026.

The next fund reflected that emphasis on the beginning. Announced in May 2022, Fund V raised $400 million, taking YL’s reported capital under management to $800 million across five funds. Its stated plan was to lead seed rounds in ten startups, roughly three a year, with capacity for follow-on investment. Dividing $400 million by ten would mistake a fund’s reserves for a standard seed check.

The introduction cannot buy demand

Then there is Minimus. Its founders had previously built Twistlock, acquired by Palo Alto Networks for about $410 million. Their next company raised $51 million from investors including YL and Mayfield, started as Gutsy, changed direction and became Minimus. The eventual proposition was secure, stripped-down software building blocks.

Commercial momentum did not follow. In August 2026, the founders announced a wind-down. Globes reported roughly $10 million remained to return to investors. On August 27, Echo announced it had acquired key assets and was arranging continuity for customers. Useful technology survived; the original independent business did not.

The failure was commercial traction, as reported publicly, rather than a demonstrated collapse of the underlying technology. Neither a familiar founding team nor substantial seed funding settled the question of demand. In a crowded category, even well-connected buyers can decide their existing supplier is sufficient. That is the condition under which this approach runs out of road.

Borrow the sequence

The portfolio keeps moving. Orca addresses cloud security; MIND works on data loss prevention; Opti tackles identity governance. Aim Security, backed by YL, was acquired by Cato Networks in September 2025. In August 2026, YL announced a fourth consecutive top-decile placement in PitchBook’s global manager tables, an attributed performance marker rather than a promise about the next fund.

For founders, the useful move is concrete: approach with a security problem, then ask prospective buyers what would stop deployment. For enterprise security leaders, advising offers a way to influence tools before they harden into finished products. Readers outside venture capital can copy the order: find the operator, hear the objection, revise, and test willingness to pay. The first useful introduction may be the one that stops you building the wrong thing.