Fearless Fund, a renowned venture capital firm situated in Atlanta and known for investing in businesses run by women of color, faces an unexpected lawsuit citing racial discrimination. The accuser is the American Alliance for Equal Rights (AAER), a group closely linked to a conservative activist involved in high-profile legal action against affirmative action in college admissions [1].
The founders of the Fearless Fund are three black women who have made their mark in various fields. Entrepreneur Arian Simone, organizational consultant Ayana Parsons, and actress/businesswoman Keshia Knight Pulliam (famously known as Rudy from “The Cosby Show”) established the firm in 2019. The lawsuit against them surfaced first in a Reuters news report [2].
Funding challenges persist for black entrepreneurs, particularly black women, in the competitive venture capital sphere. Nonprofit advocacy group Digitalundivided reported a mere 0.0006% of VC funding flowed towards businesses started by black women between 2009 and 2017 [3]. Fearless Fund aims to rectify this imbalance.
In 2021, the funding landscape began to shift, albeit slightly, in favor of black and Latina women. Their combined share of venture capital exceeded 1% for the first time, as reported in the 2022 Project Diane report by Digitalundivided [4].
Over the last four years, Fearless Fund has secured over $25 million, investing in more than 40 companies, including Slutty Vegan, Partake Foods, Live Tinted, and The Lip Bar. June saw them receiving multi-million-dollar follow-on investments from industry giants like Bank of America, Costco, and Mastercard.
The lawsuit centers around Fearless Fund’s third annual Fearless Strivers Grant Contest in association with Mastercard. AAER, led by Edward Blum, alleges racial exclusivity of the grant contest, contending it infringes on the nation’s civil rights laws [5]. Blum previously challenged affirmative action in college admissions through his group, Students for Fair Admissions [6].
Despite these legal hurdles, Fearless Fund has found unwavering support in Atlanta’s black business community. Many fear the broader implications of the lawsuit and its potential impact on businesses that primarily cater to black people. Ryan Wilson, CEO and co-founder of The Gathering Spot, is among those ready to rally behind Fearless Fund [7].
While the Fearless Fund faces significant legal challenges, its vision remains undeterred. The firm’s Instagram post articulates their resolve: “We are fearless. We are Black women.” They reaffirm their commitment to creating economic opportunities for women of color and vow to continue their work [8].
References:
[1] American Alliance for Equal Rights (AAER)
[2] Reuters
[3] Digitalundivided
[4] Project Diane
[5] AAER Lawsuit
[6] Students for Fair Admissions
[7] The Gathering Spot
[8] Fearless Fund Instagram Post