This tech investor writes memos like short stories
CWO speaks to Sarah Drinkwater about narrative tension in investing
Some professionals make writing their secret weapon, even when it's not their job title. I see this constantly in startup investing—VCs who build their brands through sharp blog posts and LinkedIn hot takes.
But here's a deeper question: beyond building your brand, could writing actually make you a better investor? Sarah Drinkwater thinks so. She's a solo GP at Common Magic, an "artisan" venture capital firm she founded by herself.
Sarah arrived at a career backing early-stage tech companies after stints as a journalist, a fashion blogger, and time in the tech/startup ecosystem. Unlike VCs who write for visibility, Sarah uses writing as her core investment tool through investment memos, a document that explains why a startup is worth backing.
Why it matters: Sarah has made writing and reading her cognitive edge as an investor, showing the power of narrative thinking in deciding which bets to take on the future.
EW: How has writing carried you through different jobs, from journalist and blogger to working in startups and tech, and now investing?
SD: I have written since I was a little girl. I think in your 40s, you find yourself doing the thing that you did as a kid. That's the thing you purely enjoy.
I joined the tech industry. I joined startups. I sold myself early on based on my writing skills. To me, writing is a way of documenting what you think. I tend to come to my conclusions through writing them out, like nailing a flag to the mast of, “This is what I believe in right now.”
My work now, the work of investing, is a kind of craft. I'm a first-round investor with my own fund, where my job is not taking an opportunity to a bunch of partners and selling it to them. My job is trying to understand what the future will look like, but even more so, trying to understand who the people are that I think can adapt and be useful builders of things in that future.
I think about how it feels when I write and something's coming really easily. Similarly, there's a naturalness to my flow with a founder, where I know I will have x more meetings, do due diligence and write a memo, but intuitively I know we're going to work together.
I'm talking to a lot of LPs, and I didn't realize that lots of tiny funds don't write memos. It's just part of my process. Like the guy I met this morning building something in privacy and compliance for developers. There was a depth of thinking that made his opportunity very attractive to me, and it made me excited to ask him 1,000 more questions, and to document in writing, “What am I underwriting right now?” I don't think I could hold that in my head all at once [without writing].
EW: What does one of your memos look like and include?
SD: I always start with assumptions, which are like macro points, and then you get into the actual company. It’s almost like the “turn” in a great short story. There’s a tree, a cat gets up it, there’s peril. How is the cat going to get down? Is it going to get down? That's the ‘turn’.
There has to be some narrative tension in memos. The narrative tension is: this is extremely risky. There's a lot of magical thinking involved in making any investment. If you were a logical person, you would not bet on early-stage companies. And yet, here I am, sharing the dream of the founder.
EW: Trying to write a narrative to a company is also a way of stress testing them as well? If you can’t construct a cohesive narrative, there’s something wrong.
SD: Narrative, ‘why we're doing what we're doing’, is an anchoring mechanism that powers you on when you have really hard days. The second way that I have to be able to construct a narrative is to raise money [for Common Magic] as well. I need to be able to talk about why this company is right for me and why this company will win.
Narrative, ‘why we're doing what we're doing’, is an anchoring mechanism that powers you on when you have really hard days.
EW: Do you use AI tools yourself for writing?
I use Granola to take notes on every call, which is plugged into Attio, my CRM. I actually don't use a lot of AI writing tools in my writing because, for me, writing is a proxy for my thinking. Nothing should get in the way of that, whether it's [writing for] my newsletter or my memos.
I use Google Docs. I've used Claude for research, but I would not copy and paste from Claude into my investment memos.
AI tools can be incredible thought starters sometimes, but I like the way that I write, and I have to practice the way that I write in order to be good at it.
EW: It’s almost like exercise.
SD: It's exactly that. If I did not work out for a month, I would expect that my mind would not feel good, and my body would not feel good. And it's a bit the same with writing and reading.
I think good writers, or writers that I admire in my personal network, read voraciously. And actually, the more that I meet people that I think of as great investors, I keep learning they're the same.
I always worried that I didn't have the skill set to become a great investor, and I think there's no point in doing anything unless you want to be really good at it. But if you are spending your day job working out where to place bets against the future, you can't really do that unless you're reading and putting down in words what you think is the future.
EW: To bring our conversation to the future, we’re already seeing GenAI tools change what reading means. It becomes more about remixing and summarizing.
SD: What I worry about, and what I observe is happening, is that reading and writing are becoming a kind of luxury good.
Particularly having a six-year-old son, I think the act of giving deep attention to the thing you're doing right now is really important. This stands for your work, your relationships, your exercise, anything you want to do.
I think there's going to be a certain kind of person, a small population, who will be able to maintain their focus, their attention, their reading and their writing. I think there's going to be a lot of people who are not able to make the time to read and write. I think there's going to be a lot of people who will not need to, or who will not think they need to.
I come from a rural Irish background; my grandmother left school at 12. She never got the education that I did. I can't accept that reading and writing for the masses is a 100-year thing.
The challenge is that when you take away the critical skill set of being able to construct a letter or an essay or an argument from a massive group of people, you're taking away their power in so many ways.
When you take away that critical skill set of being able to construct a letter or an essay or an argument from a massive group of people, you're taking away their power.
EW: What does that mean for people who want to make writing their profession? Or other creatives?
SD: I’ve invested in Ellipsus, a Berlin company building GitHub for writers. It's a place for very Internet-native fan fiction writers to write together, attribute, and publish. They have a huge volume of users who cannot find what they need on Google Docs, Notion or any AI-first tool.
There will always be people who write and always be people who read, but it comes back to scale, right? When I was a kid in the 90s, writers were celebrities and rock stars because of their scale of distribution. There are always ebbs and flows in the cultural scenes, but I think writing is something humans have always done and will always continue to do. What matters to me more is the consumption of those words — how we read stuff, how we interpret stuff, how we meet people through words.
EW: Writing on the Internet has allowed me to meet so many people!
SD: The idea of bi-directional discovery online is very new. In the Victorian era, it was very much a long tail market—a couple of smash hit winners and this massive tail of sad, ignored writers in their attics. Then social media gave us the illusion of mass distribution.
Are we going back to those olden days? I literally have 104 subscribers now. I used to have a fashion blog in the noughties with hundreds of thousands of readers. It's very humbling to go back to having my 104 readers, because I'm basically writing for myself now, and I'm getting a lot of joy from that.
EW: But then platforms go dark or obsolete. It’s a cycle of creation and destruction.
SD: Maybe this is my age, but I actually feel like a lot of comfort in the creation-destruction cycle. If writing and reading are a muscle, it's really hard to destroy that because you can't create it afterwards. I see that with my son's friends. [My son] has two parents who met as writers. We have a lot of books at home. He reads a lot. There are kids in his class who are equally as bright as him, whose parents don't read, and they get given an iPad a lot of the time.
It starts really small. I think it's really important to encourage kids to write for no end, to write for no reason, to write for themselves, to write without commerce. That's actually really important to me. I will never, I don't think I will ever make money from writing again, and I've made absolute peace with that, like I don't care about money from writing. Writing is my joy.
Other voices, other rooms
🔥 The literary world is aflutter that Anthropic will pay authors $1.5 billion for using their books to train models, around $3,000 per work. Yet look deeper and there’s no reason to cheer. The case is based on the use of pirated works. Non-pirated books may thus fall under fair use. As one board director of a party to the settlement put it wryly: “AI is based on tokens—and the settlement value is a token.”
Reading this week
🔥 Big news: technologists and web publishers (incl. Reddit/Quora/Medium) have proposed a new training-data licensing system — but will AI companies play ball?
🎨 On Pixiv, a platform for artists to share/comment on work, more AI-generated content “led to 50% more new artworks, but no corresponding increase in views or comments”.
👩🏻💻 An oldie but a goodie about Stripe’s writing culture: “Stripe is a celebration of the written word which happens to be incorporated in the state of Delaware.”
✍️ Sarah shared her 3 favorite pieces of her own writing:
This week, AI tools were used to correct spelling, and record and transcribe the interview.
Thanks for the words, mems and memes always. If you were forwarded this email, please support by subscribing below.
Absolutely brilliant interview - thank CWO and Sarah Drinkwater.
Great interview. Fascinating to hear Sarah’s views on anything but particularly reading and writing and AI. Thank you!