Venture Capital's New Frontier: How Justin Ernest is Bridging the Gap for Family Offices
Justin Ernest has found a unique way to invest in high-growth tech startups without traditional VC funds. Learn how he’s connecting family offices with top deals.
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Imagine a world where family offices and smaller institutional investors could easily access shares of some of the fastest-growing AI companies, but couldn't due to limited access. That's exactly what Justin Ernest noticed last year.
Ernest, who spent over five years at Playground Global investing in deep tech and leading fundraising efforts, saw an opportunity to bridge this gap. Instead of launching a formal VC fund, which can take 12 to 18 months, he used his extensive network to secure allocations of stock in high-profile, later-stage companies.
Through his firm, Sabertooth Capital, Ernest offers these individual deals using special purpose vehicles (SPVs), single-asset funds, and nominee structures. Over the last year, Sabertooth has invested nearly $500 million into 10 companies, including Anthropic, Anduril, Base Power, Databricks, PsiQuantum, and SpaceX.
Each deal is structured as its own separate fund, often as an SPV where investors buy shares in the vehicle that owns the stock. Ernest has been writing checks ranging from $10 million to $275 million, gaining significant chunks of shares in these companies. He always participates in official funding rounds.
While not the only firm offering family offices this opportunity, Ernest quickly gained a reputation for legitimacy and expertise. Benjamin Wagner, CIO for a family office managing 50 individuals, said, 'Justin is authentically an investor. He has judgment, he has expertise, that really distinguishes him from other organizations.'
Ernest's success lies in his wide network and ability to secure allocations of stock when highly coveted tech companies are raising capital. His Harvard Business School background and strategic communication skills have played a significant role.
For now, Ernest wants to continue growing his business of raising funds for specific companies on behalf of his dedicated LP base. However, his ultimate goal is to eventually raise a traditional venture fund. He believes Sabertooth's strong returns from SPVs like Groq and SpaceX’s upcoming IPO will prove his track record.
Ernest remains confident that starting with SPVs was the right strategic move. 'I wanted to be in the action,' he said, 'and I think this will end up being one of the best vintages of our lifetime.'
