Venture Capital Fund For Black Women In Epic Legal Battle Against Conservatives With An Agenda

After abortion rights and affirmative action, an attempt to end minority business funding is underway, Fearless Fund’s co-founder says.

Black women are the nation’s most prolific entrepreneurs. About 17 percent of Black women were starting or running a new business in 2021, compared to 15 percent of White men and 10 percent of White women, according to a study in the Harvard Business Review.

But a lack of access to capital for Black women, who get less than 0.35 percent of all venture capital (VC) funding, makes it an uphill battle to operate thriving businesses. 

Atlanta-based Fearless Fund, a VC that invests in women of color-led businesses, came into the investment space to help close the funding gap. 

But now, the conservative group American Alliance for Equal Rights sued Fearless Fund in August, alleging that it engages in “explicit racial exclusion” by operating a grant program “open only to Black females.” 

Appeals Court Halts Venture Capital Fund Grant For Black Women Entrepreneurs

Edward Blum, who leads the Alliance, was also behind the lawsuit against Harvard and the University of North Carolina in which the U.S. Supreme Court ended race-conscious college admissions in July.

In an interview, Fearless Fund’s CEO and co-founder Arian Simone told that the fund and its Fearless Fund Foundation are fighting against conservative forces with a far-reaching agenda. 

In this battle, they’ve received support from organizations that recognize the broader threat. The National Minority Supplier Development Council (NMSDC) launched the #WeAreAllFearless fundraising campaign Wednesday (Nov. 15) to support the Fearless Fund Foundation’s legal defense. spoke with Simone about the lawsuit and Fearless Fund’s efforts to continue its mission. Many VCs focus on funding specific groups based on their identity. Why do you think the lawsuit targets Fearless Fund?

Arian Simone: It's not just this lawsuit. There is an anti-American campaign that is going on: Roe vs. Wade (abortion rights), affirmative action overruled, and now minority funding is under attack. So there's a bigger plan at play. 

It's like a shirt with a string, Roe v. Wade, being pulled. Then, you pull another string, affirmative action. And as you keep pulling strings, the shirt is undone – stopping millions and billions of dollars from getting into the hands of people of color.

This lawsuit is a defining moment. They’re trying to create a precedent and use this case as a baseline.

They may have just thought that we’re a small entity, and they could easily achieve their precedent and baseline. There are many theories out there. I honestly, on record, do not know. But we plan to stand by the work that we do. How has the lawsuit impacted your mission?

Arian Simone: We do have to pause on some work. But it doesn't change or alter our mission. The work will continue. With conservative judges in control of the Supreme Court and many lower courts, do you have a Plan B in place to continue your work of funding women of color-led companies? 

Arian Simone: We will continue to work regardless of the outcome. We may have to change what that looks like. But the result will still be the same. We will have to meet with legal advisors on how to operate. 

But the work will continue because it has to do with closing disparities. Women of color are the most underfunded demographic. Unfortunately, Black women receive only a fraction of a small fraction of funding to women. So we must do this work.

Kelly Burton in a panel discussion at Web Summit 2022 in Lisbon, Portugal.

Organization Builds Black Business Ecosystem While Breaking Systemic Barriers To Black Prosperity What's been the overall response to this lawsuit from the VC community?

Arian Simone: While grateful for our supporters, we're looking for more. It will take everybody who believes that it’s important to stand up. Because when we win, everybody wins. But if we lose, everybody loses, literally. Tell me about the #WeAreAllFearless Campaign.

Arian Simone: NMSDC launched the campaign. They were moved by all of the efforts and the work that we do with the Fearless Fund. And they wanted to support us in the situation that we're in. 

We are grateful they launched this campaign because they want other people to know that it's not just us on the front line. This lawsuit is unprecedented. NMSDC launched the campaign to help us raise money so that we would not have any financial constraints while fighting the lawsuit. What keeps you motivated to do this work?

Arian Simone: Watching the investments and grants employ people keeps me motivated. What keeps me motivated is watching our founders have an opportunity to build generational wealth. What keeps me motivated is seeing Black and Brown businesses able to scale and grow.

Before Fearless Fund existed, the average investment check to Black women was around $36,000. We came into the game to cut seven-figure checks. So that's what keeps me motivated. On your website it says that companies with a female founder perform 63 percent better on average than all-male founding teams. Why is that? 

Arian Simone: It’s the diversity of thought. Every diversity report, whether the McKinsey, Kauffman, or Kellogg Reports, found that diverse teams outperform non-diverse teams. 

We have all races at our firm. We have both sexes at our firm. We are very diverse in our hiring strategies because we understand the power of diversity of thought. It produces bigger returns across the board. The stats have proven it. 

Women, of course, are decision-makers in their households regarding money. Women are very mindful of putting money, when money comes in, back into their community. They're very conscious of that. 

Women of color are innovators and very creative. They are natural bootstrappers – not because of choice but because of situations and circumstances. Projecting five years into the future, where do you see the fund and the foundation?

Arian Simone: Where do I see the fund in the foundation in five years? Billions in assets under management. International impact. Black and Brown female unicorns.

Editor’s Note: This article has been edited for length and clarity.

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