Published in the February 2025 edition of Emerging Manager Monthly.

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Strategic venture capital and growth equity firm Moderne Ventures is focused on investing in technology transforming the world. For Founder and Managing Partner Constance Freedman, that drive for transformation powered her through her own career, which began on the “entrepreneurial operational side of the world,” she said. Freedman initially spent seven years in tech at venture-backed startups, where she worked on bringing Fortune 500 online for the first time. “[After that] I knew that I wanted to do something transformational again and I wasn’t quite sure what, so that drove me to business school to try to figure it out,” she said, adding that she got her master’s degree at Harvard University, where her interest in entrepreneurship took off after learning “that you can buy companies, you don’t have to necessarily start companies.”

After business school, Freedman spent two and a half years at an early-stage venture fund focused on consumer and information media until 2008 when she came across an opportunity with the National Association of Realtors. There she brought together a real estate tech venture and launched a fund, which she refers to as the predecessor fund for Moderne, called Second Century Ventures.

“When I started that fund, it was the first time I had a five or 10-year vision of what I wanted to do, and I knew I wanted to build that track record and spin out my own fund and so that’s what I did,” Freedman said, noting that she spun out Moderne in 2015 with the same investment strategy. Chicago-based Moderne is focused on companies that can “really transform how we do business."

"We look at it really from two perspectives. In one hand, it’s thinking about technologies at large that are making a big difference in the world. If we think about that today, we’re thinking about robotics, AI, digital transactions, connectivity, and so those can really transform how we do business,” Freedman explained. “But then we also look at technology from the standpoint of how do people do business and why does it matter? And so, things like workforce optimization or lead gen or customer experience and how do I make more money or how do I build a bigger bottom line or more brand value? I think all those have to matter. Cool technology is not a reason to invest; meaningful business results is what we drive to, and marrying the two."

Moderne announced the close of its third fund with over $230 million last year, exceeding its oversubscribed $200 million Fund II and bringing the firm’s total assets under management to more than $500 million. Institutional investors in Moderne Ventures Core Fund III included GCM Grosvenor and the Illinois Growth and Innovation Fund. Moderne has faced different challenges and different cycles over the course of its three funds, according to Freedman.

“Back in 2015, the biggest challenge was proving that as a new manager, I was worthy of investing,” she said. “We had a $43 million fund off the back of our $20 million proof of concept fund, and people would be like, well, what’s your ownership targets? Well, I’m a $43 million fund...my point right now is I’m going to prove that I can get into the deals, and later I’ll prove that we can get meaningful ownership in the deals.”

“Moderne Core Fund I was proving my worth. Moderne Core Fund II is a $200 million fund which we raised in 2020, beyond COVID and raising the whole thing on Zoom. I think the bigger challenge there, just as a fund, was staying true to our fundamentals because valuations were going crazy. And so that was being able to win deals based on our platform and our strategic value versus trying to win on price,” she continued.

Moderne also had a side-by-side growth fund when starting the third core strategy “and then when the economy turned, we just said, let’s just focus on the core fund,” according to Freedman, who noted that now that the third fund has closed, the firm is introducing its Moderne Growth Fund I. “For Moderne Core Funds, we focus on companies with $2million to $20 million in revenue. For the Moderne Growth Fund, we focus on companies with more than $20 million in revenue– so late-stage venture really,” Freedman said. “Fifty percent of Moderne Growth Fund will be to focus on doubling down on the highest growth companies across the existing core fund portfolio once we’ve maxed out of core fund allocations, and the other 50% will be net new. It’s a really big opportunity to take advantage of market conditions but also really to be able to double down on these companies we know so well and deserve it.

Woman-owned Moderne is also in the process of expanding – the firm has a team of 15 going on 20 people, according to Freedman, who highlighted that Partner Liza Benson has been with her “since close to the beginning.”

In addition to its venture pursuits, the firm also runs its Passport Program, a six-month industry immersion program, which differentiates itself in the competitive venture space. The program “helps companies refine and execute their go- to-market strategies,” connect with members of the Moderne network of corporations and executives from market leading companies and provides mentorship, pilot opportunities and investment and acquisition potential for participants, according to the firm.

For Freedman, she views the firm as a modern platform for venture. “The name Moderne represents our forward-thinking approach to venture investing, focusing on technologies that apply broadly across industries which together is a modern approach to investing. The globally recognized spelling of Moderne signifies the global reach our companies have and their impact on our global investors,” she added. Like many others, Freedman finds a sense of excitement in the venture space. “I’ve never been someone who likes to be in a box, so venture is exciting to me because by nature you’re looking at new and innovative ways of doing things and what’s the next transformational concept that you can get involved in and how can you take part in it? And building companies, looking at new opportunities and new ways to grow is my passion. I get to do that every day, not only within my firm, but with all the firms I get to work with,” she said.

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