IVCA Profile: For International Women’s Day, Founder & Managing Partner Constance Freedman of Moderne Ventures

March 13, 2024

March is Women’s History Month, and International Women’s Day was five days ago on March 8th. In the second part of a series, the IVCA explores the contributions of women in the Venture Capital and Private Equity industries, as strides are made in a historically male dominated space. To talk about these issues, the IVCA reached out to Founder and Managing Partner Constance Freedman of Moderne Ventures.

Constance Freedman is the Founder and Managing Partner of Moderne Ventures and the Moderne Passport, an early stage investment fund and industry immersion program which is focused on investing in technology companies in and around the multi-trillion dollar industries of real estate, finance, insurance, hospitality and home services. Moderne Ventures has more than $450M AUM, has invested in over 135 companies and partners with 700+ industry executives and corporations to build strategic value and scale. Ms. Freedman’s initial two funds have produced top decile returns, four IPOs (plus one IPO pending), eight Unicorns, and 25+ successful exits.

Ms. Freedman has been the recipient of several prestigious awards including HousingWire’s Women of Influence, Crain’s Business 40 under 40, Crain’s Chicago Top Tech 50 (three times), Swanopoel’s Power 200 and Inman’s Top 101 in Real Estate.  Ms. Freedman is frequently an invited keynote speaker at nationally and internationally renowned venture industry, real estate and fintech conferences.

Ms. Freedman is a member of the Young Presidents Organization (YPO), is a Global Governing Trustee for the Urban Land Institute, and is a Board Member for Illinois Venture Capital Association. She previously served on the Advisory Board for the National Venture Capital Association’s Corporate Venturing Group, was on the board of overseers for the non-profit, From the Top, the advisory panel for Fannie Mae’s Sustainable Communities Innovation Challenge and is a member of the ULI Multifamily Platinum Council.

The IVCA interviewed Constance Freedman in the following profile …

IVCA: We are doing this profile both for International Women’s Day, which was March 8th, and of course Women’s History Month in March. What is a brief description of your own personal journey to founding Moderne Ventures, especially your childhood and schooling background that spurred your interest?

Constance Freedman: I have a unique background in real estate, tech and venture.  

I grew up in Minnesota and worked a lot of pre-college jobs before starting out in real estate… three years of sales and leasing … to put myself through undergrad at Boston University. I graduated just before the dot.com boom and moved into tech. I taught myself html and database design and was taking computer science classes. I built my company’s first website and upon graduation I took a job at a venture-backed startup to help bring fortune 500 companies online. I consulted for firms like JP Morgan, Financial Times, Blue Cross Blue Shield and others to help them build their online strategies, and then I managed large tech teams to implement the strategies.

In 2004 I left to get my MBA at Harvard Business School, and it was there that I became interested in Venture. I started at a traditional VC fund, Cueball, doing early stage information and consumer investing for two-and-a-half years before launching Second Century Ventures with NAR in 2008 … the predecessor to my fund now, Moderne Ventures. I launched Moderne Fund I in 2015 with $40M, Moderne Fund II was oversubscribed at $200M in March 2020 and we recently launched Moderne Fund III which will be a 2024 vintage. 

IVCA: What, in your point of view, is the ‘secret sauce’ of Moderne Ventures?

Freedman: Moderne Ventures takes a generalist approach to vertical investing and brings customers to its companies – a strategy which de-risks venture and is designed to generate outsized returns for investors. 

When I launched our predecessor fund in 2008 with NAR, I initially thought we would be investing in a Real Estate Tech Fund, something we now call “Proptech.” However, while honing the strategy and before making any single investment, I came to the realization that it would be hard to make venture returns with that singular strategy. While real estate and its adjacent industries of finance, insurance and sustainability are multi trillion-dollar markets ripe for innovation and make up to >20% of the US GDP, they are also prone to cyclicality and have highly fragmented demand markets.

IVCA: So how did you capitalize this opportunity?

Freedman: To capitalize on the massive market opportunity, but also hedge for the market dynamics, I shifted the investment thesis such that we would invest in companies that apply to these core industries … but also to broader markets as well, which can therefore generate much larger returns.

My very first investment was in DocuSign’s Series B in 2009, which is exemplary of this strategy and with few exceptions every company that we have invested in ever since … it applies not only to real estate and its adjacent industries but also has broader applicability into other markets. Most recently, we invested in Notarize, an e-notary and secure transactions business, and Qloo, an AI-driven marketing platform matching customer preferences to brands.  We call this a generalist approach to vertical investing.

IVCA: Anything else that you feel is one-of-a-kind when it comes to Moderne Ventures?

Freedman: The second strategy that is unique to Moderne is that we bring customers to our companies. I started what is now called the Moderne’s Passport Program in 2013, which is a six month customer growth program focused on opening doors and generating sales channels for our portfolio companies.

We have built up a network of 1,500+ strategic industry partners, a subset of whom are Moderne investors. These partners help us evaluate and de-risk deals, help our companies build and position their products to be successful in our industries, and most importantly … become customers for our companies.

IVCA: The current percentages for general partner positions held by women in the Venture Capital industry stands at 15%, despite a 50% population of women in the world. What do you think is the main reasons for that low percentage, and how do you think the industry and business educational institutes can raise those numbers?

Freedman: People tend to work with people who are just like them, despite the studies from Harvard, Kauffman, McKinsey, Credit Suisse and more, that show diverse teams produce better returns – like we see at Moderne Ventures. 

Outside of recruiting for diversity, the best way to increase the number of women in our field is to invest in the women who are already here, doing the work and excelling. Invest in their funds, invest in their portfolio companies. This is what moves the needle. This is what creates momentum.  

IVCA: I note on your team page you have nine women in key positions and five men. Was this something that you strove to do or did you just have a sisterhood network in place that allowed you to staff accordingly?

Freedman: This is not about a sisterhood … I simply hire the best people. The only reason more women aren’t hired at venture funds is because those hiring are not open to recruiting them. Having diversity of perspective, thought, and personal experience is critical to the work we do and the returns we produce. I will continue to value team diversity and cultivate the best talent as we grow.

IVCA: In your knowledge of the history of women’s influence on society, what shoulders do you think you stand on that had gotten you to the position you have, either symbolically or mentor-oriented directly and why?

Freedman: The shoulders to stand on are the people around me doing incredible things … those who inspire me … and most importantly turn around and tell me I can do it too.  I strive to surround myself with people who have a positive attitude, will never stop at the word ‘no’ and are passionate about what they do. I’m lucky to have a hugely supportive husband, family, business partner and an amazing team around me that inspire me to be my best every day. 

IVCA: Finally, what do you recommend to the other membership of the IVCA to increase the VC/PE Industries profile for younger girls to college age women so they can consider a career in the fields?

Freedman: Hire them.

Encourage them. 

Expose them.

Be inclusive.

I am the only female on almost every board I sit on, with the exception of the board that has a female CEO.

Can’t we do better? Yes. We can expose girls and women to the concepts of risk and reward from an early age, to get them comfortable and confident, so that they can hone their skills to be analytical and powerful decision makers … and surround them deliberately with other amazing women. 

An executive recently asked me what they could do to promote diversity in their organization. I asked him what percent of the execs were women and he told me the answer … one percent.  So I turned the question back to him and now I turn the answer back to you and the audience here.

Representation in leadership matters.

For more information about Constance Freedman and Moderne Ventures, click https://www.moderneventures.com/