Justin Ernest has invested nearly $500 million in high-growth startups, including SpaceX and Anthropic, without setting up a traditional venture capital fund.
Innovative Investment Approach
Ernest, previously at Playground Global, utilized his network to secure stock allocations in prominent, later-stage companies. Rather than establishing a formal VC fund, which can take up to 18 months, he offers these investments to around 30 smaller institutional investors. He uses special purpose vehicles (SPVs), single-asset funds, and nominee structures through his firm, Sabertooth Capital.
Sabertooth Capital has invested in companies like Anthropic, Anduril, Base Power, Databricks, PsiQuantum, and SpaceX in the past year. Each deal is treated as a separate fund, typically structured as an SPV where investors buy shares in a vehicle holding the company's stock.
Building Trust and Reputation
Ernest's strategy allows him to write checks between $10 million and $275 million, gaining substantial shares by participating in official company-approved funding rounds. His reputation among family offices helps him quickly raise significant cash, as these organizations often find it difficult to access such high-profile investments.
Benjamin Wagner, CIO for a family office, praises Ernest's investment acumen, noting his judgment and technical expertise. Wagner's attempt to invest directly in PsiQuantum led him to Sabertooth on the company's CFO's recommendation.
Strategic Networking
Ernest's ability to secure stock allocations is attributed to his extensive network, which he strategically leverages. A Harvard Business School alumnus, he overcame a childhood speech impediment, enhancing his communication skills. This personal journey contributes to his effectiveness in securing investments for his SPVs.
He can quickly mobilize capital for new SPVs from family offices, often with just a few phone calls. He aims to continue growing Sabertooth's business model, with an eventual goal to establish a traditional venture fund, leveraging the strong returns from his SPVs to prove his track record.
Future Prospects
Sabertooth has already seen substantial returns, notably from chipmaker Groq's acquisition by Nvidia for $20 billion. Upcoming events like SpaceX's IPO and Anthropic's expected public listing promise further gains.
While SPVs don't carry the same prestige as traditional VC funds, Ernest believes this approach positions him well for future success, describing the current investment climate as potentially one of the best in recent times.
Source: https://techcrunch.com/2026/06/09/how-justin-ernest-invested-nearly-500m-into-hot-startups-without-a-traditional-vc-fund/
