How Justin Ernest invested nearly $500M into hot startups without a traditional VC fund

Overview

Justin Ernest, founder of the firm Sabertooth, invested nearly $500 million into 10 late-stage startups over 12 months without raising a traditional venture fund. He instead used special purpose vehicles and a captive group of about 30 institutional investors, mostly family offices, to buy stakes in companies such as Anthropic, SpaceX, Databricks, PsiQuantum, and Base Power. Checks ran from $10 million to $275 million per deal, and the firm has already booked one exit through Groq's $20 billion sale to Nvidia.

Key Takeaways

Sabertooth founder Justin Ernest put close to $500 million into 10 sought-after private companies in a single year without first raising a formal fund.
Instead of one pooled fund, he treats each deal as its own vehicle, mostly special purpose vehicles, where his investors buy into an entity holding the startup's shares.
His backers are a captive group of roughly 30 institutional investors, mostly family offices, who commit fast after a handful of phone calls.
The named portfolio spans top AI and deep-tech names: Anthropic, SpaceX, Databricks, PsiQuantum, and Base Power.
Sabertooth has already scored a win through Groq, which Nvidia acqui-hired and licensed in a roughly $20 billion deal in late 2025.
Ernest plans to use this track record to eventually raise a traditional venture fund.

Stats & Key Facts

#Nearly $500 million deployed across 10 startups in 12 months
#Individual checks ranged from $10 million to $275 million per deal
#About 30 institutional investors form the captive LP base
#Four to six phone calls typically secure commitments for a deal
#Groq sold to Nvidia for roughly $20 billion in late 2025
#More than 5 years spent at Playground Global before founding Sabertooth

The $500 Million Run Without a Standing Fund

Ernest skipped the year-long grind of raising a blind pool and still wrote large checks into hard-to-enter companies.

Over the past 12 months, Sabertooth deployed close to $500 million across 10 startups. Individual checks ran from $10 million on the low end to $275 million on the high end, giving the firm meaningful positions in each company.

Most venture investors raise one fund and draw from it deal by deal. Ernest reached nearly half a billion dollars in deployment without ever closing such a fund, which is the central oddity of his approach.

How Special Purpose Vehicles Replace a Blind Pool

Rather than pooling all the money up front, Ernest builds a fresh structure for every investment.

›Most deals run through a special purpose vehicle, where backers buy shares in an entity that holds the startup's stock.
›He also uses single-asset funds dedicated to one company.
›Some positions use a nominee structure, where Sabertooth holds the shares on behalf of the backers.
›Each deal is its own separate vehicle rather than part of one shared fund.
›Ernest says he always invests through official, company-approved funding rounds.

A Captive Network of 30 Family Offices

The speed of the model rests on a small, reliable set of investors he knows well.

Ernest describes a captive group of about 30 smaller institutional investors, most of them family offices, who commit quickly when he brings a deal. He says four to six phone calls are usually enough to fill a vehicle because he already knows what each backer will put in.

This tight base lets him move at the pace top startups demand. Companies with long waiting lists hand out allocations to investors who close fast and without friction, which is the edge a known network provides.

Inside the Portfolio: Anthropic, SpaceX, and Deep Tech

The named holdings concentrate on AI and frontier-technology leaders.

›Anthropic, the AI lab, with a public listing reported as expected later in 2026.
›SpaceX, Elon Musk's rocket company, with an IPO reported as imminent at the time of the article.
›Databricks, the data and AI platform.
›PsiQuantum, a quantum computing developer.
›Base Power, an energy startup.

The Groq Exit That Validated the Model

Sabertooth has already returned a win to its backers.

Chipmaker Groq was licensed and acqui-hired by Nvidia in a deal valued at roughly $20 billion in late 2025. For a firm operating without a traditional fund, an early exit of this size is the kind of proof point that builds credibility with the next round of backers.

Groq is described as a realized win rather than a current holding, and it sits alongside the active portfolio as evidence the deal-by-deal model produces results.

Ernest's Deep-Tech Background

His investing approach grew out of years spent in frontier technology.

›Spent more than 5 years at Playground Global investing in deep technology.
›Holds an MBA as a Harvard Business School graduate.
›Describes his network itself as his core advantage as an investor.
›Overcame a childhood speech impediment, a detail he ties to his focus on relationships.

What This Signals for Private-Market Access

The story points to a lighter path into elite private deals.

For investors without a standing fund, Ernest's playbook shows a faster route into companies that normally turn newcomers away. Stitching together about 30 dependable backers reached nearly $500 million in deployment in one year, no multi-year fundraise required.

His longer-term plan is to convert this track record into a traditional venture fund. For now, the deal-by-deal structure trades the stability of a pooled fund for speed and the freedom to chase allocations as they open up.

Frequently Asked Questions

What is a special purpose vehicle and why does Ernest use one?

A special purpose vehicle is a separate entity created to hold the shares of a single startup, with investors buying into that entity rather than a broad fund. Ernest uses it so each deal stands on its own and backers fund only the specific companies they want.

How did Ernest invest nearly $500 million without a venture fund?

He relied on a captive group of about 30 institutional investors, mostly family offices, who commit quickly to individual deals. By building a fresh vehicle for each investment, he reached close to $500 million across 10 companies in 12 months.

Which companies are in the Sabertooth portfolio?

The named holdings include Anthropic, SpaceX, Databricks, PsiQuantum, and Base Power. The firm also had an early exit through Groq, which Nvidia acqui-hired in late 2025.

What is the difference between this and a normal VC fund?

A normal venture fund pools money up front into one blind pool that the manager invests over years. Ernest instead raises money deal by deal, so investors choose each company and capital is committed only when a specific opportunity appears.

Does Ernest plan to raise a traditional fund later?

Yes. His longer-term goal is to use the track record from these deal-by-deal vehicles to raise a traditional venture fund in the future.

Ernest's approach shows that a trusted network and flexible deal structures can open doors to top private companies without the long slog of a formal fundraise. With one exit already booked and a roster of frontier-tech names, the deal-by-deal model has bought him a track record he plans to turn into a fund of his own.