Fearless Fund, founded in 2019 by Ayana Parsons and Arian Simone, aims to provide venture capital financing, grants, and financial education to startups founded by Black women. This demographic is both underserved and promising, as Crunchbase data reveals that less than 1% of all VC dollars in 2023 went to Black-founded startups. Despite this, Fearless Fund has managed to invest $26 million into over 40 companies, including Slutty Vegan, The Lip Bar, Partake Foods, and Live Tinted.
The fund has been able to raise money from private limited partners who support its mission. These companies are still private startups, and with the lack of traditional VC funding going to businesses led by Black women, the community is taking matters into their own hands by building their own rails.
However, Fearless Fund is facing a legal challenge from the American Alliance for Equal Rights (AAER), a politically conservative group. AAER argues that Fearless Fund’s $20,000 small business grants program for Black women violates the Civil Rights Act of 1866, which prohibits the use of race in contracts. This lawsuit, led by activist Edward Blum, who has a history of challenging affirmative action, has not been going well for Fearless Fund. An appeals court recently upheld a preliminary injunction preventing the fund from making grants to Black women business owners.
The case has sparked frustration within the community as it seems ironic to use the Civil Rights Act of 1866, originally designed to help the formerly enslaved, against a program that aims to support the community it seeks to help. The frustration was evident when Ayana Parsons had an emotional moment on stage at the ForbesBLK Summit in Atlanta, where she spoke about the burden faced by Black women in the country.
Parsons recently announced her resignation from Fearless Fund, although she stated that the lawsuit was not a motivating factor for her decision. She founded the firm with the goal of changing the game for women of color entrepreneurs who face significant challenges in accessing capital, resources, education, and networks needed to scale their businesses. Despite stepping down, Parsons remains committed to fighting for freedom and supporting women of color entrepreneurs.
Unfortunately, the tech ecosystem has not shown strong support for Fearless Fund and similar initiatives. The fund has lost partnerships with major companies, with JPMorgan and Costco being the only remaining partners. Even Mastercard, who sponsored the contested Strivers Grant, has not publicly commented on the lawsuit. This lack of support reflects a broader shift in the tech industry, where the focus on diversity, equity, and inclusion (DEI) has waned since its peak in 2020 after the murder of George Floyd. The current trend is to praise meritocracy rather than actively promote DEI efforts.
In conclusion, Fearless Fund’s mission to support Black women entrepreneurs is critical in addressing the lack of funding and resources they face. Despite legal challenges and a lack of support from major companies, the fund remains determined to make a difference. The ongoing struggle highlights the importance of continuing efforts to promote diversity and inclusion in the tech industry and beyond.