Justin Ernest Channels Nearly $500 Million into Promising Startups Outside Traditional Venture Capital Frameworks

Last year, Justin Ernest observed a significant disparity in how venture capital operated: family offices and smaller institutional investors were highly interested in investing in the fastest-growing AI companies but lacked access to their capital structure information.

With over five years of experience at Playground Global focusing on deep tech investments and leading fundraising efforts, Ernest was confident that his extensive connections between investors and founders would enable him to bridge this gap.

Rather than establishing a traditional VC fund—a process he noted typically takes new managers between 12 and 18 months—Ernest leveraged his network to secure equity allocations in well-known, later-stage companies. He then offered these individual investment opportunities to roughly 30 smaller institutional investors through special purpose vehicles, which function as single-deal funds.

Over the past 12 months, his firm, Sabertooth Capital, has invested nearly $500 million across 10 companies, including Anthropic, Anduril, Base Power, Databricks, PsiQuantum, and SpaceX. The firm treats each transaction as a separate fund, usually structured as an SPV in which the investors purchase shares in the vehicle that holds the company’s stock.

He allocates funding amounts ranging from $10 million to $275 million per deal, thereby acquiring substantial shares in the target companies, and he always participates in official fundraising rounds approved by the companies themselves.

Sabertooth is not the only firm providing family offices with the chance to acquire equity in individual high-profile, late-stage startups. Nevertheless, Ernest was able to raise significant capital from these clients quickly because of his solid reputation in the niche market of small-scale allocations and SPVs aimed at family offices.

“Justin is genuinely a true investor,” said Benjamin Wagner, CIO of a family office managing assets for 50 individuals. “He possesses sound judgment and deep expertise, along with strong technical knowledge, which truly sets him apart from other organizations that, in my view, mainly focus on gathering capital rather than making informed investment decisions.”

When Wagner attempted to invest directly in PsiQuantum, the quantum computing startup previously valued at $7 billion, the company’s CFO recommended that he go through Sabertooth for his investment.

“The first time I met [Ernest], I knew he was legitimate,” Wagner said. “Justin’s access to opportunities is definitely different from that of some unscrupulous firms.”

This kind of validation is extremely important. At a time when companies like Anthropic and Anduril are cracking down on unauthorized SPVs, investing through Sabertooth offers smaller limited partners greater peace of mind, as they know their funds are being entrusted to an investor who has been thoroughly vetted and respected by the target companies themselves.

In addition to his technical skills, this Harvard Business School graduate developed strong communication abilities after overcoming a childhood speech impediment. Ernest attributes his success in securing stock allocations when highly sought-after tech companies are raising capital to his extensive network.

“I’ve always found that my greatest strength lies in being the core of my network, and I enjoy using that connection strategically,” he told TechCrunch.

For example, he is often able to secure investor capital for a new SPV from family offices within a short timeframe.

“I have a dedicated group of limited partners,” he said. “Usually, after making four or five or six phone calls, I already know exactly how much each partner will commit.”

Ernest told TechCrunch that for now, his focus is on continuing to expand his business of raising funds for specific companies on behalf of his loyal client base. However, his long-term goal is to eventually establish a traditional venture fund. Although this is a challenging endeavor, he believes Sabertooth’s strong returns from these one-off SPV investments can serve as proof of track record—a factor that investors prioritize most when deciding to support a new fund.

He is making progress toward achieving this goal. Sabertooth has already realized a major return from chipmaker Groq, which was licensed and acquired by Nvidia for $20 billion late last year. Upcoming events such as SpaceX’s highly anticipated IPO this Friday and Anthropic’s expected public listing later this year are likely to bring even greater returns to his investors.

Despite the fact that SPVs do not enjoy the same level of recognition as traditional VC funds, Ernest remains confident that starting with them and building a solid reputation among family offices was the right strategic approach, rather than launching a conventional venture fund and competing with established firms. “I wanted to be directly involved in the action,” he said. “I think this could turn out to be one of the best investment opportunities of our lifetime.”

Updated to reflect Sabertooth’s total capital deployed.