The venture capital fund that backs small, Black women owned businesses has now responded to a lawsuit accusing it of racial discrimination. The American Alliance for Equal Rights, a conservative group, filed the lawsuit against the Fearless Fund. The conservative group was instrumental in the dismantling of affirmative action by the Supreme Court.
The lawsuit against Fearless Fund was filed in federal court in Atlanta. It alleges that 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.
The Fearless Fund released a statement following a press conference, shedding light on the case and the way forward. In the statement, the fund’s cofounders, Arian Simone and Ayana Parsons shared that they are proud of the work that they have done.
“At a time when efforts to advance equity are under attack, the mission of our fund and our commitment to principles of anti-discrimination could not be stronger. We stand firm in our purpose to provide a gateway to economic freedom,” the statement read
The fund’s statement also reiterated its mission to “promote a global society where marginalized and underrepresented communities are empowered with unbiased access to the resources and assistance that are critical to achieve business success.”
Fearless Fund, also shares that the “AAER’s actions reflect a comprehensive and coordinated push from extremist organizations and attorneys general to seize on the Supreme Court’s recent gutting of affirmative action in higher education. Within weeks of the highly criticized ruling, several state AGs fired off a controversial letter to Fortune 100 companies warning they would consider DEI initiatives as a form of discrimination. That has become a catalyst for more legal groups to attack critical investments in marginalized communities.”
Edward Blum is the founder of the 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.”
An Attack On Economic Freedom
In addition to releasing an official statement, Fearless Fund’s Co-founder and CEO Arian Simone spoke with Gayle King for CBS about the lawsuit, calling it an “attack to dismantle and address our economic freedom as people of color.” Simone shared that she initially thought the lawsuit was a joke when news of it first reached her. Despite its reality the fund will continue to move forward with its mission.
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 Alliance say some of the group’s approximately 60 members – white and Asian American – have been excluded from the grant program because of their race.
Some of the relief that Blum’s nonprofit is seeking in the suit includes, a declaratory judgment that Fearless Fund violates Section 1981 as well as a temporary restraining order and preliminary injunction barring defendants from closing the fourth application period.