Aoifinn Devitt: Our next guest has just closed her second venture fund, which was oversubscribed. Find out what she believes is the passport to success in VC and prop tech in particular. I’m Aoifinn Devitt, and welcome to the 50 Faces Podcast, a podcast committed to revealing the richness and diversity of the world of investment by focusing on its people. I’m joined today by Constance Friedman, who is founder and managing partner at Modern Ventures, as well as Modern 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. Modern Ventures recently closed on its second fund and was oversubscribed at over $200 million. She sits on numerous boards and has received several awards, including Crain’s Business 40 Under 40 and Chicago Top Tech 50 on 3 occasions. Welcome, Constance. Thanks for joining me today.
Constance: Thank you so much for having me.
Aoifinn Devitt: Well, let’s start by talking a little bit about your current role. What sector do you focus on and why do you feel that these sectors are attractive in your view?
Constance: Yes. So we invest, as you said, in technologies in and around real estate, finance, insurance, and home services. Now, this new word— I say new, it’s been around for 5, 6 years now— called proptech has emerged and, you know, kind of referring to property tech. But what I will say is The way that we look at this from Modern is much broader than just “prop tech.” We look at companies and technologies that are kind of— we take a generalist approach, I’d say, to tech and investing and innovation that’s happening broadly. And then we bring it into these multi-trillion-dollar industries, which are very nascent in terms of how they use technology., and where we believe there’s a huge green space and a ton of opportunity to grow young companies. And so we’ve been doing this now since 2008. And I would say that a confluence of factors that have made it really take off in the last decade, and especially the last few years, ranging from COVID and everybody literally working, living, and playing in their homes and not having the ability to get to places where real estate generally transacts and a plethora of other factors that have really made the largest companies in the world really around our industries start to lean into technology. And so it’s a really exciting time to be part of it, a really exciting time to be bringing new companies into the space.
Aoifinn Devitt: And one of the really unique things about your business model is the Modern Passport program. Can you describe what that is and what kind of assistance does it provide and how does it factor into your investment process later?
Constance: Yeah, so the way we’re structured, I’ll kind of call it maybe like 3 legs of a platform. So at the top, we have a fund, and the fund, we invest in companies $2 to $20 million in revenue. So, you know, general venture capital fund. And you then, know, the second leg of the platform is this network that we’ve pulled together over the last 13 years or so, which consists of about 700 executives and corporates across our industries. So people who are looking for tech and innovation to create a competitive advantage, and often they’re looking to Modern to help find those companies that can help them do so. And the way we bring together our companies with the network is through this program called the Modern Passport. And this is a 7-month, what we call an industry immersion program. It helps to provide companies— and this is a stage-agnostic program, so we have companies pre-revenue all the way up to $60 million in revenues, and seed financing all the way up to half-billion-dollar companies. And what we do during this program is 4 main things. First, we’ll help provide our companies with strategic guidance, so how to approach our industries, go-to-market strategies, pricing, things like this. Secondly, what we call mentor meetings, and so we arrange about 1,000 mentor meetings every single year. These are one-on-one meetings between our company executives, our tech companies, and the network that I talked about, the industry executives that I talked about. And, you know, this is really good business development opportunities on both sides for the technology companies introducing their new innovations and technology into the industry, and you then, know, feedback on how the industry perceives the value of these companies coming in. And then thirdly, we help our companies create pilot programs. So low or no-cost ways for our corporate partners to sort of try before they buy. So also helps our tech companies to land and expand. And then finally, exposure. So about once a month, we generally meet about once a month or maybe twice a month virtually now, where we will hold things like lunch and learns for executives at the big industry partner corporations, or we’ll get them up on stage at a big conference, an industry conference. Or for one of our partners’ conference, really just ways to help educate the industry that these companies exist. So by the end of this program, our companies either have very, very robust pipeline and sales associated with it, or they’re absolutely not going to be right for our industries. And it’s generally pretty binary. We know either way. And this also helps us to both help our portfolio companies grow as well as give a tremendous amount of feedback to our own investment decisions.
Aoifinn Devitt: Seems like you’ve created this tremendous ecosystem there for proptech and beyond. And how fertile of a ground is that then for you in terms of finding investment ideas, as well as finding investors to back these ideas?
Constance: Yeah, it’s pretty much the crux of it, I would say. So we spend so much time with the industry execs really understanding market opportunities, challenges, and drivers and gaps. And then we go out into the tech world and the venture world and really source for those challenges and gaps. And like I said in the beginning, a lot of these things aren’t necessarily unique to our industries. They’re not unique to real estate or prop tech, but they fit very well inside of it. So often we’re taking companies from outside our industries and bringing them in. As an example, everybody knows about DocuSign. That was one of my very first investments where You would never call that a prop tech, fintech, or insurtech company, but clearly makes a lot of sense across all of these. We recently invested in a company called Stride, which provides benefits to the 1099 workforce. And, you know, as my partner Liza likes to joke, the realtors were the first 1099 workers, you know? And so, you know, it’s kind of bringing in— and today they power big companies like Uber and Lyft and Amazon, but also the real estate franchises. And so we’re really trying to think out of the box at looking at, well, what are people in our industries trying to solve for? It’s not necessarily— you don’t need to invent the wheel. Let’s see how they solve for it in other industries and bring it inside. And so the Passport is a way to see if it works.
Aoifinn Devitt: Is this somewhat unique among your peers? I mean, are you aware that other venture groups build these networks and programs in order to really complement what they do on the investment fund side?
Constance: Yeah, I certainly am aware that people talk a lot about it. I think that I’ll just be honest though, like it’s you hard, know, we’ve been doing this now for more than 13 years. It takes a long time to build up the kind of network that we’ve built up. And the sort of results is what tells everything. And so we’ve now had over 100 companies go through the Passport Program. We’ve invested in about 25 to 30% of those companies. We’ve had 3 IPOs, an additional one that’s been announced and pending. We’ve had 6 unicorns come through it, 3 funds, the first 2 are tracking at top decile, both in North America as well as globally in terms of venture funds. And so, you know, what I think we’ve been able to show is certainly we’ve built up a very meaningful and effective network. And it’s easy to talk about people you know, but it’s a completely different thing to act on it.
Aoifinn Devitt: Turning now to your own journey into this role, how did you first get introduced to venture capital investing? And did your journey take any surprising turns along the way?
Constance: Yeah, I have a funny journey, actually. So I would say that I did not necessarily have a 10-year plan until about 10 years ago. And I think that’s maybe true of a lot of people, but I have a funny background of real estate, tech, and venture, which is how this kind of all came together. But I really started my career back in undergrad in real estate, where real estate was a college job for me, a real college job, but that’s where I really started. And so I spent about 3 years doing sales and leasing. And during undergrad, I started to turn my head towards tech. And I graduated just before the dot-com days and spent about 7 years where I was bringing the Fortune 500 online. Both strategically thinking about helping the number of companies think about how do I both think about the presence online, but then also I was managing large tech teams to actually implement that. And it was really in business school, I got my MBA at Harvard Business School, and it was really there that I started looking at venture and really getting interested on the investing side of it. Out of business school is where I started at a traditional venture fund where we were focused on information media and consumer. Then I spent 2.5 years at a traditional fund and then came across this opportunity where the National Association of Realtors had just taken $50 million off the table and wanted to continue investing in early-stage tech around the real estate space. And so I partnered with them to launch the predecessor fund to Modern Ventures back in 2008, and it brought together for the first time real estate, tech, and venture. And so spent several years with them, and then after fully vesting that first fund is when I launched Modern to bring a larger set of LPs, a broader set of capital, to continue on this investment thesis.
Aoifinn Devitt: So definitely a considerable amount of time spent in the weeds and on the operating side and kind of knowing how these companies work. Just curious, given you have been to business school, and whether there are any courses there that you think can really teach the ropes of venture capital investing, or does it all have to be learned on the job?
Constance: I would definitely say a big combination. I think that my experience at HBS definitely helped to provide a lot of basis of the education along the way. I mean, from the very, I guess, just from the start of it, it was where my interest in venture began in the first place. And part of it is just understanding what the industry can do and has done and meeting people in the industry. And, you know, we definitely, there were venture and entrepreneurial courses and just kind of starting to get the idea of the impact that it can make, and that definitely stemmed from there. And yeah, and even my first— well, both— as I emerged from there, my network that I built there, I joined a fund with an HBS alum and got connected with the opportunity of the National Association of Realtors initially with another HBS alum. So I think that the network along the way, the education, as well as the environment, all, I would say, lent itself spurred my interest.
Aoifinn Devitt: Right, so benefits inside and outside the classroom. I want to move now to a question I’ve asked some other guests on this series around your experience as a female in venture capital, whether you think it was different, whether you think the fundraising process was different for you, and just maybe a comment generally on how well women are represented in venture capital and in tech, in your view.
Constance: So it’s a very interesting and topical question and one that’s It’s both fun and hard to talk about at the same time. I think there’s still far less than 10% of executives in venture are female. That’s abysmal. I will say that I think that the journey has changed or the experience has changed since I’ve been doing this, in particular, since I’ve had my own funds that I was raising for across the venture spectrum. So LPs as well, right? So I think that, yeah, venture and finance in general has definitely been a men’s club for a really long time, like kind of since its inception. And I think that I would say that why are there so few female executives? I mean, one of those reasons I think is because you go to raise capital and it’s easy to go to your friends and get funding. And I say that very, you know, I mean, it’s more than that obviously, but there’s something to that and something to that network. And I think that as a female, when you go to raise those same funds, you know, I think that there’s There’s biases, I think that there’s network, I think that there’s a number of things, including inappropriate behavior that gets played into that journey. And it’s sad, but I think it’s also changing, luckily. And I can tell you that our last fund that we just raised, that we just closed on, the number of female LPs that we pitched to was far different than my first fund. And I think that the formality and the assessment and everything about it is changing a bit. And so I’m hoping, I sincerely hope that the journey for people behind me gets easier for those, you know, along the way. I think we are the most diverse venture fund on the planet. I have staff of many young women and, you know, another female partner, and I’ve had African American partners. We’re very open to diversity and You know, I think that that’s something that other funds you don’t see. And we think that it is beneficial and that we know that we see positive results from having diverse backgrounds and profiles looking and advising and bringing these new companies into the world. So we see a big benefit from it and presumably our LPs do as well.
Aoifinn Devitt: Clearly you live and breathe diversity in Modern and also in your own networks, but how about some of those companies that are in your network in the Modern Past programs say. Are you seeing that this focus on the benefits of diversity are being felt in the industry side, like in the company side themselves?
Constance: Yeah, you know, we’re absolutely for sure seeing more and more companies pay attention to their boards and looking for more diversity on their boards. I think if you have a diverse team, you’re also willing to give more diverse investment teams a chance. Than maybe others. So we see diversity within our portfolio as well. And, you know, I think that it’s definitely becoming more topical across the ecosystem, I would say, than it has been in the past. And I think that’s a great thing.
Aoifinn Devitt: And now going back to your own career again, were there any setbacks or challenges or any key lessons learned that you can share?
Constance: Sure. It’s really easy to paint a really beautiful journey when you talk about where you’ve come from and where you’ve been, but I think that anyone who hasn’t had a setback or challenges is probably lying. So, you know, I think of course there have been. I think everything from being, you know, waitlisted at the business schools I wanted to go to the first time and kind of try, try again, to an investment that perhaps went bad. And I think that the most important lesson to learn from that is Recognize what happened or a mistake you might’ve made along the way. Don’t do it again. And to be honest about it, meaning if you made a mistake, make sure you own up to it. I guess those are the kinds of philosophies that we try to live by, and there’s something to really be learned from it. I’ll give an example of even an LP letter that went out today about a particular portfolio company where nothing really bad happened, but some terms changed. I sent a note out to investors and just told them exactly what happened, just out of spirit of being completely transparent. I actually got an email from one of my colleagues that works for me and they said, “This was a beautiful letter. It was so well written and thank you for showing that leadership and doing the right thing.” I think, again, there was nothing bad that necessarily happened, but I think other people may have just not been honest about it. And I don’t believe in that. And so it was really great to get that feedback from someone who works for me. And I imagine I’ll get the same kind of feedback from the investors. I do get that kind of feedback from investors. Just, I think it’s important to be open and honest, and nothing bad happens by doing that. Exactly.
Aoifinn Devitt: And I think also being open and honest and early about that is something that will gain you and win you respect later. So that’s another, another piece of that puzzle I’ve heard. So looking at any key people, were there any key people in your career that influenced you along the way and how?
Constance: Yeah, I would say both personally and professionally there’s been a lot of key people along the way. And as I you was, know, sort of thinking about this question, I’ll kind of summarize it to when I think about those people, the common thread is that I felt like there were people who had my back, or who I felt like they were sort of like me and were doing it themselves. So like examples I could follow. And I think that both those kinds of people are really great to have in your life. And so, you know, who had my back? I mean, I have a very wonderful supportive family, a very wonderful supportive husband who always gave me the confidence that I can do what I set out to do. And friends, sometimes you just need that friend that you really respect or a colleague that you really respect that can be a confidant and have that person come back and say, well, you can do that. Sometimes it’s that little boost of confidence that puts you on your way. And so, you know, I’ve got several friends along the way that have done that. Peers who break out and do something on their own or break out and do something that just kind of leading by example, if you will, helps give you the confidence. Well, I can do that too. And I’ll also say just some key mentors that I’ve adopted along the way, some of my early investors, individual investors who I just have a tremendous amount of respect for and felt like I could, again, go to as a confidant and answer the tough questions or give me the encouragement that I’ve needed. And some of these are the CEOs of our network, our executive network, and backed me or backed me with their companies. And really just helped give me the confidence and encouragement that, yes, this is something needed in our industry. And if you pave the way, you’ll find the rewards and we’ll even back you as a result. So a lot of the people in my journey that have influenced me have been those people.
Aoifinn Devitt: When you describe the Modern Passport program, it really does seem like a cocoon of mentors that you have both up and down.
Constance: Yeah, that’s right.
Aoifinn Devitt: Definitely, I think something that many people would benefit from. And when you think about these mentors and any advice maybe that any shared with you, was there any key piece of advice or is there any creed or motto that you live by now?
Constance: Well, you know, it’s, it’s really funny. Some people have asked me like, where did you come up with this? How did this all come about? And I had a professor in undergrad who would talk about building your network and how important it was to build your network and always be networking. And back in undergrad, what are you thinking about? You’re thinking about where’s my next job going to be, or what do I want to do in my life, and you’re also kind of like, you don’t really have much of a network, right? Maybe some people do. I didn’t. My family didn’t have as much of a relevant network for something that I. And so if it’s up to you, how do you build that network? And I don’t know if it was the same professor or just learning over time, but I got some advice along the way somewhere, which was build an excuse to reach out to that network. As you start building the network, make an excuse for why you should reach out to it, but never waste anybody’s time, right? So don’t just call someone and say, hey, do you want to go have a coffee? You know, someone that you’re not close to. But if you can give value to that same person, of course they’re going to want to meet with you or talk with you. So I think early on I started thinking about building a network and what kind of beneficial value you could provide both ways. And as I think about where Passport came from, it might have really been that. It might have really been that advice I’d gotten so many years ago where it was about, all right, if I can find the very best companies for the industry The industry is going to want to know about them and they’re going to want to use them. And if they use those companies, that’s going to be valuable for those companies, it’s going to be valuable for the network, and therefore it’s going to be valuable for our fund. And so having this consistent group of companies that we bring in on a— we bring in 8 to 10 companies 2 to 3 times a year, it’s a constant feed to our network of here’s the new and exciting things coming into our industry. And the network in turn wants to know about it and reaches back out to me and reaches back out to our team and to our companies and they get involved and they participate and they tell us about their experience. And it’s just this kind of really continual synergistic win-win sort of platform. And that’s how I built my network and really what I based the business on. And I think it really probably stems back to that advice I got way back in undergrad that networking is everything.
Aoifinn Devitt: And when I ask some guests what advice they would have for their younger self, that often is what that advice is, is network earlier and don’t underestimate it. If you were to give yourself advice at a younger age, if it wasn’t that, what would it be?
Constance: You know, it might stem around confidence. I think it took me a long time to get up the confidence and the courage to just go do it. And so I think my advice to my younger self would be just go do it. You can do it. It took me a long time to figure that out. And you might not hear that from me in this interview. And my colleagues probably would be a little bit surprised to hear that from me because I’m the first one to say, let’s go do this. But it took me a while to believe in myself enough to be able to get up the courage to act on it.
Aoifinn Devitt: Well, you did go do it, and you most definitely have done it. So, Constance, when I saw about the, this, the fundraise of your second fund, I was beaming, and that has rarely happened. But it was really because it was so well deserved after so many years of hard work, persistence, and really giving. And the giving that you do in your Modern Passport program, the giving you do to the other women in the industry, and giving of your time to podcasts like this is most definitely appreciated. So thank you so much for coming here and sharing your insights with us.
Constance: Thank you so much for having me, and I really appreciate the kind words. I really do. Thank you.
Aoifinn Devitt: I’m Aoifinn Devitt. Thank you for listening to the 50 Faces Podcast. If you liked what you heard and would like to tune in to hear more inspiring investors on their personal journeys, please subscribe on Apple Podcasts or wherever you got your podcasts. This podcast is for informational purposes only and should not be construed as investment advice, and all views are personal and should not be attributed to the organizations and affiliations of the host or any guest.
Aoifinn Devitt: Our next guest has just closed her second venture fund, which was oversubscribed. Find out what she believes is the passport to success in VC and prop tech in particular. I’m Aoifinn Devitt, and welcome to the 50 Faces Podcast, a podcast committed to revealing the richness and diversity of the world of investment by focusing on its people. I’m joined today by Constance Friedman, who is founder and managing partner at Modern Ventures, as well as Modern 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. Modern Ventures recently closed on its second fund and was oversubscribed at over $200 million. She sits on numerous boards and has received several awards, including Crain’s Business 40 Under 40 and Chicago Top Tech 50 on 3 occasions. Welcome, Constance. Thanks for joining me today.
Constance: Thank you so much for having me.
Aoifinn Devitt: Well, let’s start by talking a little bit about your current role. What sector do you focus on and why do you feel that these sectors are attractive in your view?
Constance: Yes. So we invest, as you said, in technologies in and around real estate, finance, insurance, and home services. Now, this new word— I say new, it’s been around for 5, 6 years now— called proptech has emerged and, you know, kind of referring to property tech. But what I will say is The way that we look at this from Modern is much broader than just “prop tech.” We look at companies and technologies that are kind of— we take a generalist approach, I’d say, to tech and investing and innovation that’s happening broadly. And then we bring it into these multi-trillion-dollar industries, which are very nascent in terms of how they use technology., and where we believe there’s a huge green space and a ton of opportunity to grow young companies. And so we’ve been doing this now since 2008. And I would say that a confluence of factors that have made it really take off in the last decade, and especially the last few years, ranging from COVID and everybody literally working, living, and playing in their homes and not having the ability to get to places where real estate generally transacts and a plethora of other factors that have really made the largest companies in the world really around our industries start to lean into technology. And so it’s a really exciting time to be part of it, a really exciting time to be bringing new companies into the space.
Aoifinn Devitt: And one of the really unique things about your business model is the Modern Passport program. Can you describe what that is and what kind of assistance does it provide and how does it factor into your investment process later?
Constance: Yeah, so the way we’re structured, I’ll kind of call it maybe like 3 legs of a platform. So at the top, we have a fund, and the fund, we invest in companies $2 to $20 million in revenue. So, you know, general venture capital fund. And you then, know, the second leg of the platform is this network that we’ve pulled together over the last 13 years or so, which consists of about 700 executives and corporates across our industries. So people who are looking for tech and innovation to create a competitive advantage, and often they’re looking to Modern to help find those companies that can help them do so. And the way we bring together our companies with the network is through this program called the Modern Passport. And this is a 7-month, what we call an industry immersion program. It helps to provide companies— and this is a stage-agnostic program, so we have companies pre-revenue all the way up to $60 million in revenues, and seed financing all the way up to half-billion-dollar companies. And what we do during this program is 4 main things. First, we’ll help provide our companies with strategic guidance, so how to approach our industries, go-to-market strategies, pricing, things like this. Secondly, what we call mentor meetings, and so we arrange about 1,000 mentor meetings every single year. These are one-on-one meetings between our company executives, our tech companies, and the network that I talked about, the industry executives that I talked about. And, you know, this is really good business development opportunities on both sides for the technology companies introducing their new innovations and technology into the industry, and you then, know, feedback on how the industry perceives the value of these companies coming in. And then thirdly, we help our companies create pilot programs. So low or no-cost ways for our corporate partners to sort of try before they buy. So also helps our tech companies to land and expand. And then finally, exposure. So about once a month, we generally meet about once a month or maybe twice a month virtually now, where we will hold things like lunch and learns for executives at the big industry partner corporations, or we’ll get them up on stage at a big conference, an industry conference. Or for one of our partners’ conference, really just ways to help educate the industry that these companies exist. So by the end of this program, our companies either have very, very robust pipeline and sales associated with it, or they’re absolutely not going to be right for our industries. And it’s generally pretty binary. We know either way. And this also helps us to both help our portfolio companies grow as well as give a tremendous amount of feedback to our own investment decisions.
Aoifinn Devitt: Seems like you’ve created this tremendous ecosystem there for proptech and beyond. And how fertile of a ground is that then for you in terms of finding investment ideas, as well as finding investors to back these ideas?
Constance: Yeah, it’s pretty much the crux of it, I would say. So we spend so much time with the industry execs really understanding market opportunities, challenges, and drivers and gaps. And then we go out into the tech world and the venture world and really source for those challenges and gaps. And like I said in the beginning, a lot of these things aren’t necessarily unique to our industries. They’re not unique to real estate or prop tech, but they fit very well inside of it. So often we’re taking companies from outside our industries and bringing them in. As an example, everybody knows about DocuSign. That was one of my very first investments where You would never call that a prop tech, fintech, or insurtech company, but clearly makes a lot of sense across all of these. We recently invested in a company called Stride, which provides benefits to the 1099 workforce. And, you know, as my partner Liza likes to joke, the realtors were the first 1099 workers, you know? And so, you know, it’s kind of bringing in— and today they power big companies like Uber and Lyft and Amazon, but also the real estate franchises. And so we’re really trying to think out of the box at looking at, well, what are people in our industries trying to solve for? It’s not necessarily— you don’t need to invent the wheel. Let’s see how they solve for it in other industries and bring it inside. And so the Passport is a way to see if it works.
Aoifinn Devitt: Is this somewhat unique among your peers? I mean, are you aware that other venture groups build these networks and programs in order to really complement what they do on the investment fund side?
Constance: Yeah, I certainly am aware that people talk a lot about it. I think that I’ll just be honest though, like it’s you hard, know, we’ve been doing this now for more than 13 years. It takes a long time to build up the kind of network that we’ve built up. And the sort of results is what tells everything. And so we’ve now had over 100 companies go through the Passport Program. We’ve invested in about 25 to 30% of those companies. We’ve had 3 IPOs, an additional one that’s been announced and pending. We’ve had 6 unicorns come through it, 3 funds, the first 2 are tracking at top decile, both in North America as well as globally in terms of venture funds. And so, you know, what I think we’ve been able to show is certainly we’ve built up a very meaningful and effective network. And it’s easy to talk about people you know, but it’s a completely different thing to act on it.
Aoifinn Devitt: Turning now to your own journey into this role, how did you first get introduced to venture capital investing? And did your journey take any surprising turns along the way?
Constance: Yeah, I have a funny journey, actually. So I would say that I did not necessarily have a 10-year plan until about 10 years ago. And I think that’s maybe true of a lot of people, but I have a funny background of real estate, tech, and venture, which is how this kind of all came together. But I really started my career back in undergrad in real estate, where real estate was a college job for me, a real college job, but that’s where I really started. And so I spent about 3 years doing sales and leasing. And during undergrad, I started to turn my head towards tech. And I graduated just before the dot-com days and spent about 7 years where I was bringing the Fortune 500 online. Both strategically thinking about helping the number of companies think about how do I both think about the presence online, but then also I was managing large tech teams to actually implement that. And it was really in business school, I got my MBA at Harvard Business School, and it was really there that I started looking at venture and really getting interested on the investing side of it. Out of business school is where I started at a traditional venture fund where we were focused on information media and consumer. Then I spent 2.5 years at a traditional fund and then came across this opportunity where the National Association of Realtors had just taken $50 million off the table and wanted to continue investing in early-stage tech around the real estate space. And so I partnered with them to launch the predecessor fund to Modern Ventures back in 2008, and it brought together for the first time real estate, tech, and venture. And so spent several years with them, and then after fully vesting that first fund is when I launched Modern to bring a larger set of LPs, a broader set of capital, to continue on this investment thesis.
Aoifinn Devitt: So definitely a considerable amount of time spent in the weeds and on the operating side and kind of knowing how these companies work. Just curious, given you have been to business school, and whether there are any courses there that you think can really teach the ropes of venture capital investing, or does it all have to be learned on the job?
Constance: I would definitely say a big combination. I think that my experience at HBS definitely helped to provide a lot of basis of the education along the way. I mean, from the very, I guess, just from the start of it, it was where my interest in venture began in the first place. And part of it is just understanding what the industry can do and has done and meeting people in the industry. And, you know, we definitely, there were venture and entrepreneurial courses and just kind of starting to get the idea of the impact that it can make, and that definitely stemmed from there. And yeah, and even my first— well, both— as I emerged from there, my network that I built there, I joined a fund with an HBS alum and got connected with the opportunity of the National Association of Realtors initially with another HBS alum. So I think that the network along the way, the education, as well as the environment, all, I would say, lent itself spurred my interest.
Aoifinn Devitt: Right, so benefits inside and outside the classroom. I want to move now to a question I’ve asked some other guests on this series around your experience as a female in venture capital, whether you think it was different, whether you think the fundraising process was different for you, and just maybe a comment generally on how well women are represented in venture capital and in tech, in your view.
Constance: So it’s a very interesting and topical question and one that’s It’s both fun and hard to talk about at the same time. I think there’s still far less than 10% of executives in venture are female. That’s abysmal. I will say that I think that the journey has changed or the experience has changed since I’ve been doing this, in particular, since I’ve had my own funds that I was raising for across the venture spectrum. So LPs as well, right? So I think that, yeah, venture and finance in general has definitely been a men’s club for a really long time, like kind of since its inception. And I think that I would say that why are there so few female executives? I mean, one of those reasons I think is because you go to raise capital and it’s easy to go to your friends and get funding. And I say that very, you know, I mean, it’s more than that obviously, but there’s something to that and something to that network. And I think that as a female, when you go to raise those same funds, you know, I think that there’s There’s biases, I think that there’s network, I think that there’s a number of things, including inappropriate behavior that gets played into that journey. And it’s sad, but I think it’s also changing, luckily. And I can tell you that our last fund that we just raised, that we just closed on, the number of female LPs that we pitched to was far different than my first fund. And I think that the formality and the assessment and everything about it is changing a bit. And so I’m hoping, I sincerely hope that the journey for people behind me gets easier for those, you know, along the way. I think we are the most diverse venture fund on the planet. I have staff of many young women and, you know, another female partner, and I’ve had African American partners. We’re very open to diversity and You know, I think that that’s something that other funds you don’t see. And we think that it is beneficial and that we know that we see positive results from having diverse backgrounds and profiles looking and advising and bringing these new companies into the world. So we see a big benefit from it and presumably our LPs do as well.
Aoifinn Devitt: Clearly you live and breathe diversity in Modern and also in your own networks, but how about some of those companies that are in your network in the Modern Past programs say. Are you seeing that this focus on the benefits of diversity are being felt in the industry side, like in the company side themselves?
Constance: Yeah, you know, we’re absolutely for sure seeing more and more companies pay attention to their boards and looking for more diversity on their boards. I think if you have a diverse team, you’re also willing to give more diverse investment teams a chance. Than maybe others. So we see diversity within our portfolio as well. And, you know, I think that it’s definitely becoming more topical across the ecosystem, I would say, than it has been in the past. And I think that’s a great thing.
Aoifinn Devitt: And now going back to your own career again, were there any setbacks or challenges or any key lessons learned that you can share?
Constance: Sure. It’s really easy to paint a really beautiful journey when you talk about where you’ve come from and where you’ve been, but I think that anyone who hasn’t had a setback or challenges is probably lying. So, you know, I think of course there have been. I think everything from being, you know, waitlisted at the business schools I wanted to go to the first time and kind of try, try again, to an investment that perhaps went bad. And I think that the most important lesson to learn from that is Recognize what happened or a mistake you might’ve made along the way. Don’t do it again. And to be honest about it, meaning if you made a mistake, make sure you own up to it. I guess those are the kinds of philosophies that we try to live by, and there’s something to really be learned from it. I’ll give an example of even an LP letter that went out today about a particular portfolio company where nothing really bad happened, but some terms changed. I sent a note out to investors and just told them exactly what happened, just out of spirit of being completely transparent. I actually got an email from one of my colleagues that works for me and they said, “This was a beautiful letter. It was so well written and thank you for showing that leadership and doing the right thing.” I think, again, there was nothing bad that necessarily happened, but I think other people may have just not been honest about it. And I don’t believe in that. And so it was really great to get that feedback from someone who works for me. And I imagine I’ll get the same kind of feedback from the investors. I do get that kind of feedback from investors. Just, I think it’s important to be open and honest, and nothing bad happens by doing that. Exactly.
Aoifinn Devitt: And I think also being open and honest and early about that is something that will gain you and win you respect later. So that’s another, another piece of that puzzle I’ve heard. So looking at any key people, were there any key people in your career that influenced you along the way and how?
Constance: Yeah, I would say both personally and professionally there’s been a lot of key people along the way. And as I you was, know, sort of thinking about this question, I’ll kind of summarize it to when I think about those people, the common thread is that I felt like there were people who had my back, or who I felt like they were sort of like me and were doing it themselves. So like examples I could follow. And I think that both those kinds of people are really great to have in your life. And so, you know, who had my back? I mean, I have a very wonderful supportive family, a very wonderful supportive husband who always gave me the confidence that I can do what I set out to do. And friends, sometimes you just need that friend that you really respect or a colleague that you really respect that can be a confidant and have that person come back and say, well, you can do that. Sometimes it’s that little boost of confidence that puts you on your way. And so, you know, I’ve got several friends along the way that have done that. Peers who break out and do something on their own or break out and do something that just kind of leading by example, if you will, helps give you the confidence. Well, I can do that too. And I’ll also say just some key mentors that I’ve adopted along the way, some of my early investors, individual investors who I just have a tremendous amount of respect for and felt like I could, again, go to as a confidant and answer the tough questions or give me the encouragement that I’ve needed. And some of these are the CEOs of our network, our executive network, and backed me or backed me with their companies. And really just helped give me the confidence and encouragement that, yes, this is something needed in our industry. And if you pave the way, you’ll find the rewards and we’ll even back you as a result. So a lot of the people in my journey that have influenced me have been those people.
Aoifinn Devitt: When you describe the Modern Passport program, it really does seem like a cocoon of mentors that you have both up and down.
Constance: Yeah, that’s right.
Aoifinn Devitt: Definitely, I think something that many people would benefit from. And when you think about these mentors and any advice maybe that any shared with you, was there any key piece of advice or is there any creed or motto that you live by now?
Constance: Well, you know, it’s, it’s really funny. Some people have asked me like, where did you come up with this? How did this all come about? And I had a professor in undergrad who would talk about building your network and how important it was to build your network and always be networking. And back in undergrad, what are you thinking about? You’re thinking about where’s my next job going to be, or what do I want to do in my life, and you’re also kind of like, you don’t really have much of a network, right? Maybe some people do. I didn’t. My family didn’t have as much of a relevant network for something that I. And so if it’s up to you, how do you build that network? And I don’t know if it was the same professor or just learning over time, but I got some advice along the way somewhere, which was build an excuse to reach out to that network. As you start building the network, make an excuse for why you should reach out to it, but never waste anybody’s time, right? So don’t just call someone and say, hey, do you want to go have a coffee? You know, someone that you’re not close to. But if you can give value to that same person, of course they’re going to want to meet with you or talk with you. So I think early on I started thinking about building a network and what kind of beneficial value you could provide both ways. And as I think about where Passport came from, it might have really been that. It might have really been that advice I’d gotten so many years ago where it was about, all right, if I can find the very best companies for the industry The industry is going to want to know about them and they’re going to want to use them. And if they use those companies, that’s going to be valuable for those companies, it’s going to be valuable for the network, and therefore it’s going to be valuable for our fund. And so having this consistent group of companies that we bring in on a— we bring in 8 to 10 companies 2 to 3 times a year, it’s a constant feed to our network of here’s the new and exciting things coming into our industry. And the network in turn wants to know about it and reaches back out to me and reaches back out to our team and to our companies and they get involved and they participate and they tell us about their experience. And it’s just this kind of really continual synergistic win-win sort of platform. And that’s how I built my network and really what I based the business on. And I think it really probably stems back to that advice I got way back in undergrad that networking is everything.
Aoifinn Devitt: And when I ask some guests what advice they would have for their younger self, that often is what that advice is, is network earlier and don’t underestimate it. If you were to give yourself advice at a younger age, if it wasn’t that, what would it be?
Constance: You know, it might stem around confidence. I think it took me a long time to get up the confidence and the courage to just go do it. And so I think my advice to my younger self would be just go do it. You can do it. It took me a long time to figure that out. And you might not hear that from me in this interview. And my colleagues probably would be a little bit surprised to hear that from me because I’m the first one to say, let’s go do this. But it took me a while to believe in myself enough to be able to get up the courage to act on it.
Aoifinn Devitt: Well, you did go do it, and you most definitely have done it. So, Constance, when I saw about the, this, the fundraise of your second fund, I was beaming, and that has rarely happened. But it was really because it was so well deserved after so many years of hard work, persistence, and really giving. And the giving that you do in your Modern Passport program, the giving you do to the other women in the industry, and giving of your time to podcasts like this is most definitely appreciated. So thank you so much for coming here and sharing your insights with us.
Constance: Thank you so much for having me, and I really appreciate the kind words. I really do. Thank you.
Aoifinn Devitt: I’m Aoifinn Devitt. Thank you for listening to the 50 Faces Podcast. If you liked what you heard and would like to tune in to hear more inspiring investors on their personal journeys, please subscribe on Apple Podcasts or wherever you got your podcasts. This podcast is for informational purposes only and should not be construed as investment advice, and all views are personal and should not be attributed to the organizations and affiliations of the host or any guest.
