The lawsuit preventing Fearless Fund from allocating funding to Black women entrepreneurs has been settled.
As AFROTECH™ previously reported, Fearless Fund, currently led by founding partner Arian Simone, was sued by legal activist Edward Blum and his American Alliance for Equal Rights group. In the lawsuit, filed in the U.S. District Court in Atlanta, GA, in August 2023, the investment firm had been accused of “explicit racial exclusion” for creating a grant program that was “open only to Black females,” with the lawsuit alleging that it went against the Civil Rights Act of 1866.
Blum and the group flagged Fearless Fund’s efforts of providing $20,000 in grants and mentorship directed to Black women due to a violation of “race neutrality,” The Washington Post reports.
Initially, U.S. District Judge Thomas W. Thrash was in favor of the Fearless Fund, which at the time had been guided by Simone and COO Ayana Parsons, who later stepped down from her role in April 2024.
The Post mentioned, on Sept. 26, 2023, Judge Thrash labeled the Fearless Fund’s actions as charitable giving, thus protecting the firm under the provisions of the First Amendment.
“Women of color continue to face significant barriers in obtaining access to capital. We are very pleased with the court’s decision to deny [the] plaintiff’s attempt to shut down our grant program and look forward to continuing to advance our critical mission,” Simone and Parsons said in a joint statement, according to the outlet.
Blum found the decision disappointing and planned to proceed with an appeal.
“Our nation’s civil rights laws do not permit racial distinctions because some groups are overrepresented in various endeavors, while others are underrepresented,” he told the publication.
However, the Atlanta-based venture capital firm’s victory was short-lived. On Sept. 30, 2023, the U.S. Court of Appeals for the 11th Circuit approved a temporary injunction filed by Blum that barred Fearless Fund from awarding grant funding.
“We respectfully disagree with this court’s decision, appreciate the important points raised by the dissent, and look forward to further appellate review,” said Jason Schwartz, a lawyer representing the Fearless Fund, at the time. “We remain committed to defending our clients’ meaningful work.”
Fearless Fund filed an appeal to the September ruling on Dec. 6, 2023, to fight for its grant program.
“The Alliance seeks to enjoin a grant and mentorship program designed to ‘bridge the gap in venture capital funding’ that Black women entrepreneurs face as a result of historical discrimination,” the appeal read, per 11Alive in Atlanta.
In January 2024, both parties met in Miami, FL, in front of a three-judge panel, with Fearless Funding asking for the injunction to be lifted.
Simone shared what the experience was like during the 2024 Good Soil Forum held on June 14 in Dallas, TX. “We’re in federals appeal court in Miami on Jan. 31st before a three-judge court, two Trump-appointed judges, one Obama-appointed judge,” she said. “From there we were waiting on a ruling on if we can continue with this grant program or not continue with this program.”
On June 3, 2024, the U.S. Court of Appeals for the 11th Circuit upheld the injunction in the case to stop the grant program, the case summary read.
“The ruling came on Monday that we cannot continue with that program,” Simone further shared during the 2024 Good Soil Forum. “They said we were violating the law and the law they were claiming we were violating was the Civil Rights Act. I said ‘Now this is crazy.’ I said ‘Funding Black women is violating a Civil Rights Act?’ Civil rights acts were made for us? I’m trying to figure out how is funding Black people in violation of civil rights? That’s how wild this situation is, where they’re flipping this on its head. So we lost the ruling 2 to 1.”
According to information provided to AFROTECH™, the matter has been settled with the American Alliance for Equal Rights.
All parties have agreed for the case to be dismissed. Per TechCrunch, the settlement entails Fearless Fund will now shut down its Strivers Grant program.
However, Fearless Fund plans to launch a $200 million debt loan program that will support under-resourced entrepreneurs, based on information shared with AFROTECH™.
“The Fearless Fund has also announced a new $200 million debt loan program aimed at supporting under-resourced entrepreneurs,” said civil rights attorney Ben Crump in a press statement. “This initiative reflects their ongoing commitment to advancing equity and creating opportunities for those who have been historically marginalized. I am proud to have stood with the Fearless Fund in this fight for economic justice and will continue to support efforts that promote fairness and inclusion.”
Simone stated, “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.”
