😇 Angel interview #4: Sarah Drinkwater

"More than any particular question is how a founder or founders answer. It tells you whether you can have a good, honest, working relationship, or not."

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Can you give a quick introduction of yourself? 🤓

Hi! I'm Sarah, based between Oakland, CA and London, UK. In previous lives, I've been a journalist, a community builder, a Big Tech operator, and now, I’m at a philanthropic venture firm, Omidyar Network, focused on fuelling the responsible tech movement.

How much experience have you had in angel investing? When did you start angel investing and how did you first hear about angel investing?

Angel investing is still new to me. I've been curious about it for a while: in the mid 10s, my day job was heading up Google's space for startups in East London, and so much of my team's work was focused on democratizing access. Great in principle - and I truly believe in community- but angel syndicates were always kind of a mystery. It became clear I should put my money where my beliefs were! So I began investing in 2018 and this year, joined the Atomico program as one of their 2020 angels.

Angel syndicates were always kind of a mystery 🧐.

How many investments have you made so far? What's your aim for # of investments in a year? How did you come to that decision?

Four so far - which about correlates to my goal of three a year (I had a baby last year so I think I can be forgiven for a little time out!). In general, I'm fussy about founders and teams. I like to take the time to get to know people.

How much time in a week do you spend on angel investing? What's the break down of your time?

Only a few hours. With a full-time job and baby, I have to be focused. In general, I get a ton of inbound so I try to only take calls with companies in areas where I know I can add value. With COVID-19, I've got comfortable working entirely remotely. Usually we'll do an intro call, start an async doc so I can ask more questions and see how the team responds, then hopefully come to conclusions.

How do you balance angel investing with your day job?

It's not too hard - with tools like Google Docs, Zoom, Notion, Miro, you can easily collaborate and get to know someone outside of working hours. My day job is more focused on Silicon Valley and larger companies, so angel investing adds to my thinking overall.

My day job is more focused on Silicon Valley and larger companies, so angel investing adds to my thinking overall.

What's your investment strategy?

Due to my background and personal passions, I love investing in hyperlocal/future of cities (not necessarily smart cities..), femtech, microentrepreneurship, and the passion economy. Open to looking at other things but, for example, I'm not the right person to look at an agtech deal.

What are some due diligence questions that are essential when diving into understanding a company and whether you would want to back them?

Given so many companies I look at are community directed (it's been such a big part of my background), I love to go deep on their strategy in this area and the user or users they center on. Responsibility is important to me; who won't they take money from, who will they sell to, what is and isn't ok? I also look at the milestone metrics and successes they want to set, how they'll think about team expansion and growth. But more than any particular question is how a founder or founders answer. It tells you whether you can have a good, honest, working relationship, or not.

[…] More than any particular question is how a founder or founders answer. It tells you whether you can have a good, honest, working relationship, or not.

How do you think about what start-up and founder you might want to back?

Founders I admire marry grit with real self-knowledge. They have a proven deep passion for this problem, but they're not married to a set solution. They have shown they can devise workarounds, set a vision for others to follow, have clear moral and ethical boundaries they've self-set. They know where they're amazing - can be tough to find in Brits! - but also where they need help. They're comfortable admitting when things aren't going well. And they're reliable; if they say you'll get an update every month, it's there's in your inbox.

Let's say there's a start-up that you really want to invest in. How do you convince them to take your check over someone else's?

Given I invest so early, usually this boils down to: how can I help them beyond money? I do like to be operational. So usually, the fit works both ways!

Let's say you've invested in a start-up and you've signed the term sheet and have equity in that company. How often do you stay in touch with the founder? How involved are you?

It depends on the company and what they need right now. I have live Whatsapp chats with most founding teams where they know they can ping me. In one case, I'm on a fundraising working group with a few of their other angels.

What tools do you use for angel investing?

Very basic! Google Docs, email...

What's the one investment you're proudest of?

I'll name two that interrelate.

Near St is a plug-in to help local stores 🏪, mainly grocery and hardware stores, list their stock online. In the pandemic, they were able to work fast to ensure shops survived and thrived, helped shoppers get what they need while keeping everyone safe. They proved how important local stores are.

Relatedly, Library of Things 📚 is a London-based thing library powered through proprietary software and smart kiosks; we're spending so much time at home right now with less discretionary income, and I'm proud of how fast they were able to pivot to COVID-19 safe delivery.

What do you like about angel investing?

I got trained as a coach a few years back because I get such pleasure - and learn so much - from helping people. Really, it's the addiction of being useful. Angel investing is brilliant because you're constantly meeting people smarter than you, focused on a problem. How can that be anything other than energizing and inspiring?

What are some challenges with angel investing?

I mean, obviously, it's tough when your companies go through hard times - especially in this moment where that has real knock-on effects in terms of small teams and layoffs. I do think for me a larger challenge is the lack of education on the market: I'm lucky that through the Atomico program I've been working alongside 12 or so smart people who can look at something from different angles. There needs to be more accessible, digestible angel education and community out there. In the US, investing is commonplace but Europe has a huge wave of doctors, lawyers, and more who have the money but lack the access and confidence.

There needs to be more accessible, digestible angel education and community out there.

What's the number #1 piece of advice you want to share with aspiring angel investors?

Don't agonize over it too much; sometimes the best way to learn is by doing.

Where can people follow you or reach out?

@sarahdrinkwater on Twitter is great or drinkwater [at] hey [dot] com

What's a great memory that you've made this year? It could be anything.

It's been a tough year with California still in lockdown so bear with me! Earlier this year, my son kissed my cheek for the first time. I melted.

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Did you enjoy this interview with Sarah? Any questions or thoughts about her story with angel investing? Leave a comment.