Constance Freedman put herself through Boston University by working in real estate while focusing on tech in her studies. She graduated in 1997, during the dot-com boom, and began her career at startups that were hired by Fortune 500 and Fortune 1000 companies trying to figure out “this Internet thing.”
Then, after graduating from Harvard Business School, she turned to another male-dominated field—venture capital (VC). She spent more than two years at Cue Ball and later ran Second Century Ventures, the National Association of Realtors’ $20 million fund that invested in companies including DocuSign. In 2015, she launched Moderne Ventures, which announced on Tuesday it had closed its first venture investment fund, at $33 million.
Freedman spoke with Newsweek about Moderne, her experiences as a woman in the VC world and what she’s doing about diversity in tech. Edited excerpts follow.
What has your experience been as a woman in the male-dominated VC world?
I’ve always kind of been part of that male-dominated field, I guess, starting with tech and into investing…. I think it’s tough for people who don’t have thick skin, because you have to ignore some of the BS while trying to show your worth, and show that you’re serious and show that you can do it despite the biases.
The number of [investors] that I approached in raising this fund who actually just wanted to turn it around and ask me for a date or go on their yacht in Nice or make some kind of pass at me—it was really frustrating. I’m married with two kids. I wanted the money, but not that bad! The frustration is almost less about that because every woman gets a catcall walking down the street, and that’s annoying, whatever. But the amount of time people waste when they’re not even serious about investing is probably the most frustrating part of that process for me.
But again, I think that, at the end of the day, you’ve got to just push that aside and keep going and know that you have the ability to do this as well or better than your male counterparts and just move on. I think that as a woman in this field, you just have to maybe prove yourself a little bit more—and as a woman in most fields, that’s the case.
Have you noticed things that have shifted and changed over the years?
This is my real first bout of fundraising, so from a fundraising perspective, I can’t really comment on that. A couple things I think I can comment on. Certainly I think that things have changed. When I think back to days of being 25 and being in corporate board settings with these companies, there was respect that came because they were looking at us as these experts in something they didn’t know. But there was probably more looseness and casualness about the sexism that, at least in most places, has gotten better.
One of the challenges is trying to find good women CEOs to back. I don’t find enough of them. We go through 4,500 companies in a given year. We might have more outward interaction with 500 or so of them. We have multiple meetings with about 100. Ultimately...we invested in four of them. In that 100 that we narrowed down to, there were just so few females, and that’s a disappointment. We’re trying to get more people noticed in the VC industry, trying to get more women involved, and for whatever reason, not everyone is at the table. So that part is almost more frustrating in this industry than my own experience.
Yours is not the only VC in Chicago led by women. What has it been like to join that landscape of women-led firms?
I moved here in 2008 from Boston. I think the attitude of Chicago in general is a bit different. I think that the coasts tend to be a little more insular, a little more competitive, a little more clubby, if you will. In Chicago, there are fewer investors. It was much more of, like, coming into open arms, like, “Oh great, there’s another investor in town, this is really wonderful.”
Since 2008, there’s been some pretty powerful families and businesspeople here that have made very concerted efforts to create a lot of technology and innovation and make this a central hub. The culture in Chicago has changed from one that was more traditionally conservative and private equity-focused to now having more of a tech vibe within it. I think that the woman landscape has probably been part of this cultural shift all along, of being a little bit more open-armed. That’s probably why women have been able to succeed here. In a place where it’s more clubby-oriented and you’re only doing business with your buddies, and it’s traditionally all men, it’s much more difficult.
What’s getting better for women in the VC and tech worlds and what’s not improving fast enough?
I think that you look at the stats, less than 6 percent of all private equity managers are female. Real estate—less than 4 percent of investment managers are female. The stats I look at in VC vary a little bit, but depending what you look at, 8 percent maybe is the high end. What’s getting better about this? I think nothing. I think if anything, the numbers have gone down, so that’s frustrating.
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I shared some of my story and the example of me going out and fundraising and not everybody has that thick of skin, nor should they, really. I mean, you don’t get men ever saying they get hit on during [investor] meetings. I think that especially early on in someone’s career, when they’re going through something like that, it kind of throws them, and people get off track that way.
But I think that maybe a bigger reason is some of this idea of this being a real apprentice kind of business. Apprenticeship is one way. Business school is one way to get in, which is only generally something like 30 to 40 percent female. Founding your own business is another way to get in, which, like I said, there’s not that many women getting funding. That’s something as an industry that we need to look at, maybe even starting with the feeders, which have their own problems for encouraging diversity.
What kind of impact do you think women in venture capital has on female founders and other women in tech?
I think it’s an interesting question. I don’t have any data on that. I can talk about some anecdotal things. There are some pretty horrible stories out there—you can read them on different VC blog posts—of women founders going into male VCs to pitch and being told, “Why aren’t you home having children?” Or more women-centric business being brushed off. Or having a woman CEO get pregnant and immediately being kicked off the board.
I think that what you get with a female VC is people who understand that. I have kids, and I can see that people can still be successful if they have children. They still can be really dedicated and into their jobs. I think there’s also, and again this is anecdotal, but I think that women can see the more traditional female-based markets. Women make the majority of household-good decisions, and I think that men have a hard time even analyzing a business like that. Women can fund more of those.
For me personally, hopefully I have less of a bias when a male and female entrepreneur come in. But the woman thing isn’t my shtick. I think first about being as successful as I possibly can. That often has to happen despite the gender. But I’m just trying to do my best. And when an entrepreneur comes in the room to pitch me, I’m evaluating them in same way.
The thing I think I do to help the woman cause is I’m actively seeking really awesome women entrepreneurs to be part of what we’re doing. When I send out newsletters to say we’re recruiting for a new Passport [accelerator] group or even in a cocktail conversation, I constantly remind people, “Think about the women entrepreneurs in your network.” I really actively try to get more women in. It’s not because it’s just a chick thing; it’s because I truly believe in diversity and the value that people of all genders and ethnicities bring.
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