Last year, Justin Ernest noticed a gap in venture capital: family offices and smaller institutional investors wanted access to the fastest-growing AI companies but often found themselves locked out of those cap tables. Having spent over five years at Playground Global investing in deep tech, Ernest believed his network could bridge that divide. Instead of launching a formal VC fund—a process he says takes new managers 12 to 18 months—he used his connections to secure allocations of stock in high-profile, later-stage companies, then offered those deals to a group of about 30 smaller institutional investors using Special Purpose Vehicles (SPVs).
Over the last 12 months, his firm, Sabertooth VC, has invested nearly $400 million into 10 companies, including Anthropic, Anduril, Databricks, PsiQuantum, and SpaceX. Each deal is structured as its own separate fund, typically an SPV, in which investors buy shares in a vehicle that owns the stock. Ernest is writing checks ranging from $10 million to $275 million, always participating in official, company-approved funding rounds.
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Why family offices trust Sabertooth VC
Sabertooth is not the only firm offering family offices a chance to purchase equity in individual late-stage startups. But Ernest has raised significant capital quickly because he has earned a solid reputation in a market where small allocations and SPVs can sometimes attract less scrupulous operators.
“Justin is authentically an investor,” said Benjamin Wagner, a CIO for a family office managing the wealth of 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.”
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When Wagner tried to invest directly in PsiQuantum, the quantum computing startup last valued at $7 billion, the company’s CFO suggested he invest through Sabertooth. “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.”
That validation matters. At a time when startups like Anthropic and Anduril are cracking down on unauthorized SPVs, investing through Sabertooth gives smaller limited partners peace of mind. They know they are entrusting their money to an investor directly vetted and respected by the companies themselves.
How Ernest built his network and deal flow
Beyond technical knowledge, the Harvard Business School graduate honed his communication skills after largely overcoming a childhood speech impediment. Ernest credits his ability to secure allocations of stock in highly 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.
For instance, he can generally obtain investor capital for a new SPV from family offices on a tight 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.”
From SPVs to a traditional fund—and early returns
Ernest told TechCrunch that for now, he wants to continue growing his business of raising funds for specific companies on behalf of his dedicated LP base. But his ultimate goal is to eventually raise a traditional venture fund. That’s a difficult task, but he believes Sabertooth’s strong returns via these one-off SPVs will prove his track record—something investors care about most when deciding to back a new fund.
He is already on his way. Sabertooth has had one major return from chipmaker Groq, which was licensed and acqui-hired by Nvidia for $20 billion late last year. Next up is SpaceX’s highly anticipated IPO this Friday, along with Anthropic’s expected public listing later this year. Both are set to deliver an even greater windfall for his investors.
SPVs do not carry the same kind of street cred as traditional VC funds. Yet Ernest remains confident that starting with them, and earning a solid reputation with family offices, rather than launching an emerging venture fund and competing with established players, 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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