Justin Ernest has deployed nearly $400 million into 10 of the most sought-after private technology companies over the past year, and he did it without launching a traditional venture capital fund.
His firm, Sabertooth VC, has invested in Anthropic, Anduril, Databricks, PsiQuantum, and SpaceX, among others. Ernest writes checks ranging from $10 million to $275 million per deal, always participating in official, company-approved funding rounds.
Bridging the Gap for Family Offices
Ernest spent more than five years at Playground Global, investing in deep tech and helping lead fundraising. Last year, he identified a significant disconnect in venture capital. Family offices and smaller institutional investors wanted to invest in the fastest-growing AI companies but could not get seats at those cap tables.
Rather than raise a formal VC fund, a process he says takes new managers 12 to 18 months, Ernest leveraged his network to secure stock allocations in later-stage, high-profile companies. He then offers those individual deals to a group of about 30 smaller institutional investors through special purpose vehicles, or SPVs, which function as single-deal funds.
Each investment is structured as its own separate fund. Investors buy shares in a vehicle that owns the stock. This approach allows smaller players to access rounds that would otherwise be closed to them.
Building Trust with Companies and Investors
Sabertooth is not the only firm giving family offices access to late-stage startup equity. But Ernest quickly raised substantial capital from them because he has built a reputation for legitimacy in a market sometimes plagued by questionable operators.
"Justin is authentically an investor," said Benjamin Wagner, a CIO for a family office that manages wealth for 50 individuals. "He has judgment, he has expertise, he's very technical, that really distinguishes him from other organizations that tend to, in my opinion, just trying to aggregate capital."
When Wagner tried to invest directly in PsiQuantum, the quantum computing startup last valued at $7 billion, the company's CFO suggested that he invest through Sabertooth. That endorsement carries weight at a time when startups like Anthropic and Anduril are cracking down on unauthorized SPVs.
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"So, the first time I met [Ernest], I knew he was legitimate," Wagner said. "Justin's access is definitely different from some of these fly-by-night organizations."
Ernest, a Harvard Business School graduate, largely overcame a childhood speech impediment and honed his communication skills. He credits his ability to secure allocations in coveted tech companies to his wide network.
"I've always found that my sort of superpower is being the nucleus of my network, and I like to use that and utilize that in a very strategic way," he told TechCrunch.
He can typically gather investor capital for a new SPV from family offices on a short timeline. "I have a captive set of LPs," he said. "I can usually make four or five or six phone calls, and I know exactly what my LPs will commit."
A Different Path to a Traditional Fund
For now, Ernest wants to continue growing Sabertooth's business of raising funds for specific companies on behalf of his dedicated limited partner base. But his ultimate goal is to eventually raise a traditional venture fund. He believes the strong returns from these one-off SPVs will prove his track record to investors.
Sabertooth has already delivered one major return. Chipmaker Groq, which was licensed and acqui-hired by Nvidia for $20 billion late last year, produced a significant windfall for Sabertooth's investors. Next up is SpaceX's highly anticipated IPO this Friday, followed by Anthropic's expected public listing later this year.
While SPVs do not carry the same cachet as traditional VC funds, Ernest is confident that starting with them and building a solid reputation with family offices was the right strategic move.
"I wanted to be in the action," he said. "I think this will end up being one of the best vintages of our lifetime."
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