How Justin Ernest invested nearly $400M into hot startups without a traditional VC fund
Key takeaways
- Having spent over five years at Playground Global investing in deep tech and helping lead fundraising, Ernest was confident his connections to both investors and founders would allow him to bridge that gap.
- Instead of launching a formal VC fund, a process he says takes new managers anywhere from 12 to 18 months, Ernest used his network to secure allocations of stock in high-profile, later-stage companies.
- Over the last 12 months, his firm, Sabertooth VC, has invested nearly $400 million into 10 companies, including Anthropic, Anduril, Databricks, PsiQuantum, and SpaceX.
Why this matters: a development in AI with implications for how people work, create, and decide.
Last year, Justin Ernest noticed a massive gap in how venture capital was working: Family offices and smaller institutional investors were eager to invest in the fastest-growing AI companies but couldn t get access to those cap tables.
Having spent over five years at Playground Global investing in deep tech and helping lead fundraising, Ernest was confident his connections to both investors and founders would allow him to bridge that gap.
Instead of launching a formal VC fund, a process he says takes new managers anywhere from 12 to 18 months, Ernest used his network to secure allocations of stock in high-profile, later-stage companies. He then offers these individual deals to a group of about 30 smaller institutional investors using special purpose vehicles (SPVs), which act as single-deal funds.