Combine 1/2 cup flour, sage, salt, and pepper in a resealable bag, set aside. Melt 1 tablespoon of butter in a large pan over medium heat. Stir in onion and cook until almost soft. Add mushrooms, and continue cooking until soft. Remove from pan.
Turn heat to medium-high and melt 2 tablespoons of butter in pan. Toss the venison steaks in the seasoned flour and shake off the excess. Sear venison in butter for 6 to 7 minutes per side and remove.
Reduce heat to medium-low, and melt the remaining tablespoon of butter. Whisk in 1 tablespoon of flour, followed by the sherry and water. Return the vegetables and meat to the pan. Increase heat, and simmer for 15 minutes.
