How this Atlanta investor deployed nearly half a billion dollars in less than two years

“His belief in Atlanta and the Southeast as an environment that will produce exponential outcomes is very exciting,” said Jon Birdsong, entrepreneur, investor and CEO of SoDo Atlanta LLC, the holding company of more than 50 historic buildings in South Downtown.

Deploying half a billion dollars

Sabertooth has invested nearly $500 million in less than two years because he has taken “a bit of a contrarian philosophy around fundraising,” he said.

An Atlanta native, Ernest studied finance at UGA. After graduating in 2013, he worked on Coca-Cola’s finance team, mostly managing equity and debt portfolios. After a few years, he went to Harvard Business School and then went to work for Playground Global, a VC firm in Silicon Valley.

Ernest was at Playground for nearly six years, where he became close with many investors and founders, before founding Sabertooth Capital last year.

Instead of raising a traditional VC fund, Sabertooth is based on “network-driven deal making,” and is focused on investing in mid- and later-stage deep tech companies, Ernest said. He uses his network to secure allocations of stock in high-profile companies for specific, interested investors.

Ernest said he draws qualities from the saber-toothed tiger as his own personal investing philosophy.

“I am fairly stealthy and quiet in the way that I invest, but we can scale up our check sizes, and we think we bring a lot of value to companies, so sort of stealthy, fierce,” he said.

There are three main types of investors Sabertooth works with: institutional investors, including other investment firms, banks and sovereign wealth groups; family offices; and high-net-worth individuals. Ernest said the firm typically invests anywhere from $10 million to $300 million in companies.

Sabertooth has had three exits so far: AI chip company Groq, Elon Musk-founded SpaceX, after its record-breaking initial public offering last week, and another Musk company, xAI.

Ernest is the sole general partner of Sabertooth, but has help on the operations side, he said. He’s also using AI to do things differently and automate some traditional C-suite roles.

“I’m really employing a more AI native strategy in terms of fund structuring, and I think this is one of our contrarian takes that we think won’t be so contrarian five years from now. But you know, I’m trying to automate the (chief operations officer) and the (chief financial officer) functions with AI sort of nativity and functionality, and so far that’s been going quite well,” he said.

Another way he’s building Sabertooth differently from his Silicon Valley peers is by being primarily based in Atlanta. In the firm’s investment portfolio is Hermeus, the Atlanta-founded hypersonic plane startup (which recently announced it will move its headquarters from metro Atlanta to California).

Ernest said over time, he wants to expand the number of Atlanta companies Sabertooth invests in.

“I want a decent sort of portion of our portfolio to be in Atlanta, because it’s where I want to hang my hat for a long time, and you know, I’m very bullish on the talent and the opportunities coming out of the city,” he said. “I just think the collaboration culture in Atlanta is second to none.”

“You see a lot more competition in other places, but there’s a very collaborative culture in Atlanta, and I think you know, not to be cliche, but I really do think that’s a secret sauce of our city here,” he added.

Having Sabertooth in Atlanta will hopefully provide “another great resource for entrepreneurs to access capital to go bigger, faster, stronger,” Birdsong said.

He explained more investment firms in the city means there’s more competition among them to get deals with founders, which could lead to friendlier terms for the city’s business owners.

“Success begets success with entrepreneurs, and so the faster that we can produce successful businesses, it compounds. And so this sort of investment with this sort of dynamic thinker that’s West Coast trained is very exciting for the ecosystem,” he added.

As Ernest brings Sabertooth from the wings into the spotlight now, the industry he’s a part of and the industries he’s investing in are changing rapidly. But even in the evolution, Ernest has a clear goal: Build the first multi-billion dollar venture platform in Atlanta.

“I think five years from now, we’ll be well on our way,” he said.