E10: The Common Magic of Community: Sarah Drinkwater on Investing with Community at the Core

In this episode of Slice, we sit down with Sarah Drinkwater, Founder and General Partner of Common Magic, a £10M early-stage fund backing founders whose ecosystems or communities serve as their moat. Common Magic writes checks ranging from £100K to £400K, investing in startups where community is integral to the product’s success.

Though now based in London, Sarah’s career has spanned the globe, from Silicon Valley to Europe. She began as a tech journalist for The Guardian and The Independent, drawn early on to the internet’s transformative potential. “I was always attracted by the internet. I moved into early-stage startups, led community at a few well-known European companies—one of which we sold to Yelp. I then joined Google but missed the early-stage world. Many of us at Google in Europe had come from startups.”

Sarah’s passion for community-building led her to the world of early-stage startups, where she helped founders develop communities. Later, she joined Atomico’sAngel Program (now defunct), which supported angels with $100,000 to write multiple early-stage cheques. There, Sarah invested in companies like Library of Things, Beautystack, Progression, Panion, and Untangle.

Throughout the episode, we explore Sarah’s philosophy on community and how she communicates this vision to founders and LPs. She shares, “What we came to call community was really about finding and keeping customers close—whether they’re consumers, developers, or businesses. Building communities firsthand showed me it’s a powerful mechanism for retaining customers.”

She elaborates on this concept in her Medium post, "Products with community at their core":

The best communities tend to bring people together around a shared identity, practice or belief (eg: playing football, I enjoy contributing to this product, time spent volunteering is important to me, I’m Jewish)

Broadcast channels aren’t communities. You’ve got to participate and listen more than you talk.

You don’t own a community; you influence, co-create and curate it.

Community building is a skill but one tech has historically not wanted to pay for

Community never has and likely never will be valued the way software engineering is in the industry, although I’d argue humans are at least as complex as code.

Common Magic is nearing its final close, with LPs across the U.S. and Europe, highlighting Sarah’s extensive network built over the years. She’s made 15 investments thus far in companies like Dottx, The Lowdown, Odin, with many more to come. We loved her optimism, candor, and relentless hustle to build a firm that reflects her values. She’s been pioneering community-building in venture long before it became mainstream, focusing on teams that “act as the layer between the product and those who use it, enabling people to interact and enrich their experience.”

If you’re a founder or LP interested in connecting with Sarah, you can reach her at sarah@commonmagic.xyz.

Special shoutout to Hugo at Intuition for the kind introduction to Sarah (you can check out his episode on investing in culture here). Happy Thanksgiving folks! See you next week with an EXPLOSIVE new guest 💥🚀🛰️

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