Justin Ernest deployed nearly $500 million into some of the most coveted AI and deep-tech companies on the planet over the past 12 months. He did it without ever launching a traditional venture fund. According to TechCrunch AI, the former Playground Global investor spotted a gap most VCs ignored: family offices and smaller institutions wanted into the cap tables of names like Anthropic, Databricks, and SpaceX, but couldn’t get access. So he built the bridge himself.
What stands out here is the structure, not just the size. Ernest’s firm, Sabertooth Capital, skips the 12-to-18-month slog of raising a formal fund. Instead, he secures stock allocations in later-stage companies and packages each deal separately for a group of about 30 smaller institutional investors. The checks run from $10 million to $275 million. The portfolio already includes Anthropic, Anduril, Base Power, Databricks, PsiQuantum, and SpaceX.
The mechanics: deals, not funds
Each investment is treated as its own mini-fund. In most cases that’s a special purpose vehicle (SPV), where investors buy shares in an entity that owns the stock. Sometimes it’s a nominee structure, where Sabertooth holds the shares on behalf of the participants directly.
The appeal for the people writing smaller checks is simple: they pick individual companies instead of betting on a blind 10-year fund. They get exposure to private AI rounds that would otherwise be locked behind big-name institutional investors.
Why access is the new moat
Here’s the part worth paying attention to. Top startups are tightening control over who sits on their cap tables. TechCrunch AI notes that companies like Anthropic and Anduril are cracking down on unauthorized SPVs, the kind that aggregate retail and family-office money without the company’s blessing.
That crackdown is exactly why Ernest’s model works. He only participates in official, company-approved rounds. When one family-office CIO, Benjamin Wagner, tried to invest directly in PsiQuantum, the startup’s own CFO pointed him to Sabertooth. “Justin’s access is definitely different from some of these fly-by-night organizations,” Wagner told TechCrunch AI, adding that Ernest “is authentically an investor” with real technical judgment.
In a market crowded with capital aggregators, being vetted by the companies themselves is the differentiator. Money is abundant. Trusted access is not.
What’s changing and why it matters now
The private AI boom has created a strange bottleneck. There’s a wall of family-office and smaller-institutional money that wants in, and a short list of hot companies that can be picky about who they let in. Ernest is arbitraging that mismatch. His edge, in his words, is being “the nucleus” of his network: “I can usually make four or five or six phone calls, and I know exactly what my LPs will commit.”
The timing also matters because the exits are arriving. Sabertooth already cashed in on chipmaker Groq, which Nvidia licensed and acqui-hired for $20 billion late last year. SpaceX’s IPO is expected this Friday, with Anthropic’s public listing anticipated later this year. Those events could turn paper positions into real returns fast.
The catch
SPVs don’t carry the prestige of a brand-name venture fund. There’s no decade-long track record, no marquee logo on Sand Hill Road. Ernest knows this. His endgame is to eventually raise a traditional fund, and he’s using Sabertooth’s returns to build the proof points that LPs care about most.
That’s the real strategy: use deal-by-deal SPVs as a fast, low-overhead way to assemble a track record, then graduate to the institutional structure once the numbers speak for themselves. “I wanted to be in the action,” he said, calling this period “one of the best vintages of our lifetime.”
Takeaways for operators and investors
- If you run a family office: verify access, not just pitch. Ask whether the manager participates in company-approved rounds, or is stacking unauthorized SPVs that a startup could later void.
- If you’re a founder: your cap table is a gate. Pointing trusted aggregators to legitimate vehicles protects you from the messy secondary market.
- If you’re an emerging manager: you may not need to wait 18 months to start. A clean, company-sanctioned SPV track record can become the on-ramp to a real fund.
Whether Ernest converts this run into a flagship fund is the open question. The Groq win, plus the SpaceX and Anthropic listings, will go a long way toward answering it. More details are available at the original TechCrunch AI report.