A group founded by conservative activist Edward Blum has filed a racial discrimination lawsuit against the Fearless Fund. This black women-led venture capital firm invests in women of color-led businesses needing financial support.
On Aug. 2, Blum’s nonprofit, American Alliance for Equal Rights, filed the lawsuit in the U.S. District Court of Atlanta, where it accused the firm of “operating a racially-discriminatory program that blatantly violates” section 1981’s guarantee of race neutrality under the Civil Rights Act of 1866.
The Alliance claimed that the fund’s Fearless Strivers Grant Contest, which awards Black women-led businesses a $20,000 grant to help scale their companies, excluded eligible Asian and white candidates because of their race, Reuters noted.
Blum, an anti-affirmative action activist, was a prominent voice behind the Supreme Court case that led to the dismantling of the race-based college admission policy in June.
What is the Fearless Fund?
In 2019, CEO Arian Simone partnered with actress Keshia Knight Pulliam and consumer marketing expert Ayana Parsons to create the Fearless Fund. The firm aims to “bridge the gap” in venture capital funding for women of color (WOC) founders. According to the firm, while women of color are founding businesses rapidly, only 0.39% of venture capital funding is allocated to WOC companies.
During an interview on CBS Mornings Aug. 10, Simone condemned the lawsuit brought forth by the American Alliance for Equal Rights. She said that the firm had played a critical role in helping not only Black women but Latina and Asian founders to scale their businesses.
“At our foundation, we have awarded over 356 grants, sized between $10,000 to $20,000… that’s definitely a game changer,” the PR guru explained. “It helps with cash flow management and helps with product creation. It can launch job creation and much more. In addition to our grants, we are also investing at our fearless fund, our investment vehicle. We have deployed over $26.5 million, invested in 41 companies. The average check size is between $500,000 and $1.2 million. Most definitely, this capital is making an impact.”
Simone claimed that the lawsuit was “an attack to dismantle” the “economic freedom” of WOC businesses. She also stood firm in her plan to fight against the suit’s allegations.
“Our response is simple. We plan to continue to do the work that we do for women of color.”
Civil rights attorney Ben Crump will represent the Fearless Fund throughout the trial. The 53-year-old attorney vowed to defend the firm and its “critical work to correct racial and gender inequities” in a post published Aug. 13 to X.
Black and Latina women startup businesses have raised an astonishing $10 billion in venture capital funding to date, according to a 2022 report by Digitalundivided. Data from the report also showed that over 350 Latina and Black women, founders could raise over $1 million. Although venture capital funding dipped slightly in 2022, it was the second most significant year for WOC funding, beating out 2021, where Black and Latina founders received “more than 1% of total venture capital,” the report noted.
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