The founder of the group that pushed for the eventual dismantling of affirmative action by the Supreme Court is now suing a Black women-led venture capital fund. Edward Blum is staunchly against affirmative action. He is suing Fearless Fund, an Atlanta-based venture capital fund that supports small businesses owned by Black women through his nonprofit American Alliance for Equal Rights. The group describes itself, as “a nationwide membership organization dedicated to challenging distinctions and preferences made on the basis of race and ethnicity.”
The lawsuit was filed in federal court in Atlanta. It alleges by making Black women the only eligible applicants for its $20,000 grant, the Fearless Fund is violating Section 1981 of the Civil Rights Act of 1866. The law prohibits racial bias in private contracts.
According to Techcrunch, “The Civil Rights Act was the first piece of federal civil rights legislation passed in the U.S., enacted to guarantee that contracts would be honored regardless of race. At the time, it was widely held at the time that the market was open to everyone, but it wasn’t really.”
A Worrying Precedent
In 2019, three influential Black women came together to found Fearless Fund. According to their website, famous actress Keshia Knight Pulliam, entrepreneur Arian Simone and corporate executive Ayana Parsons set up Fearless Fund “to address the gap that exists in venture capital funding for WOC-led businesses and to finally push the needle on the abysmal statistics that drive the current narrative for WOC-led businesses today.”
Fearless Fund has backed more than 40 businesses owned and operated by Black women. One of their portfolios even includes a business owned by Gabrielle Union. According to a report from Reuters, “Blum and the Texas-based American Alliance for Equal Rights have said some of the group’s approximately 60 members – white and Asian American – have been excluded from the grant program due to their race.”
Blum has also promised in previous interviews to continue to pursue lawsuits of this nature and like the case that helped topple affirmative action through his nonprofit in a bid to challenge race-based policies.
The venture capitalist Mandela SH Dixon has commented on the matter, calling it “harmful.” In a series of tweets, Dixon shared that this lawsuit is set to establish a dangerous precedent.
“It’s not just what this lawyer is attempting to do that’s so harmful, it’s also *who* he is strategically cherry-picking for target practice. He’s aiming to set a precedent, and who he has chosen to make an example of, says so much. We’ve seen his agenda already…,” she wrote.
Some of the relief that Blum’s nonprofit is seeking in the suit includes, “A declaratory judgment that defendants’ Fearless Strivers Grant Contest violates Section 1981. A temporary restraining order and preliminary injunction barring defendants from closing the fourth application period, selecting grant recipients, or enforcing their racially discriminatory eligibility criteria for the Fearless Strivers Grant Contest. And a permanent injunction barring Defendants from enforcing their racially discriminatory eligibility criteria for the program.”