The Fearless Fund, a venture capital fund that invests in women of color, will end its grant program for Black women business owners after a year-long battle court with a conservative group that called the program discriminatory.
In a Wednesday court filing, attorneys representing conservative activist Edward Blum and the Atlanta-based venture fund wrote that both parties “have settled,” asking the court to permanently dismiss the case, CNN reports.
Alphonso David, President and CEO of the Global Black Economic Forum and lead attorney representing the organization said in an online statement, “The resolution of this case is a positive outcome for the Fearless Fund. The parties agree that Fearless will cease operating the Strivers Grant Contest, which was already in its final stage. Importantly, the agreement is very narrow and does not restrict or relate to any other investment or charitable activity of the Fearless Fund or the Foundation going forward.”
In a statement shared with ESSECE, Fearless Fund CEO and co-founder Arian Simone said she was pleased to put the lawsuit behind her and continue with the firm’s mission of being a much needed resources to founders of color. “From the moment the lawsuit was filed, I pledged to stand firm in helping and empowering women of color entrepreneurs in need. I stand by that pledge today and in fact my commitment remains stronger than ever. “Our overarching mission remains focused on helping and empowering entrepreneurs who have been historically overlooked in the venture capital marketplace. The Fearless Fund and Fearless Foundation will continue to be a vital resource to ensure everyone has a fair shot at the American Dream,” she said.
The Fearless Fund had been in the crosshairs of the American Alliance for Equal Rights (AAER), a conservative group led by Blum, known for spearheading the Supreme Court case that ended affirmative action in higher education. Blum’ organization claimed that the Fearless Strivers Grant Contest, which had a grant program specifically for Black women entrepreneurs, was “discriminatory” and “divisive.” The lawsuit contended that the contest violated the principle of equal protection under the law by excluding other racial groups.
It’s important to note that program aimed at closing the pervasive racial gap in venture capital funding for Black women. Businesses owned by Black women received less than 1% of the $288 billion that venture capital firms deployed in 2022.
The decision to halt the grant program, which, according to the fund, was already coming to an end, was more than just a response to legal pressure. DEI (diversity, equity and inclusion) programs across the country increasingly targeted by conservative groups, Fearless Fund opted to avoid a drawn-out legal battle that could set a harmful precedent, potentially endangering minority-focused funding programs nationwide if it had gone to the Supreme Court.
“By strategically avoiding a Supreme Court ruling that could have eliminated race-based funding, we protected vital opportunities for the entire Black and brown community,” civil rights attorney Ben Crump, who also represented the Fearless Fund, said in a statement.
The fund’s settlement allowed it to shift focus to other critical ventures, including a newly announced $200 million fund to provide capital to over 3,000 under-resourced founders.
“This initiative reflects their ongoing commitment to advancing equity and creating opportunities for those who have been historically marginalized,” Crump,” said.
