Black-Owned VC Firm Faces Racial Discrimination Lawsuit

August 4, 2023 Pharaoh

The Fearless Fund plans to respond soon to an “unlawful racial discrimination” lawsuit filed impromptu against it by a conservative anti-affirmative action activist, BLACK ENTERPRISE covered.

The Atlanta-based Fearless Fund, calling itself the first VC fund built by women of color for women of color, made its intentions known to BLACK ENTERPRISE on Aug 3. The Black-owned venture capital firm was caught off guard by the suit filed this week by American Alliance for Equal Rights, led by Edward Blum.

The suit surfaced as the Fearless Fund has been a prominent and pivotal player in helping Black women business owners gain and raise capital. Started in 2019, it has raised tens of millions of dollars in financing to help Black women grow and expand businesses. The firm is led by CEO Arian Simone.

Now, the Fearless Fund is dealing with the newly reported lawsuit. Black leaders have voiced strong objections to the Supreme Court’s decision abolishing affirmative action. And some observers now question if the workplace will be Blum’s next target.

William Michael Cunningham, owner of Creative Investment Research, commented on the lawsuit in an editorial he wrote on the topic. He expressed that the American Alliance for Equal Rights has directed its negative legal stand at the Fearless Fund

Amid this controversy, Cunningham told BE pressing questions are: why this specific legal battle, why the Fearless Fund, and why now? He says his firm’s analysis suggests that American Alliance is trying to eliminate all minority and women business programs.

He added his firm’s research shows the organization stands a good chance of succeeding because of their affirmative action lawsuit that was adjudicated in their favor by the Supreme Court.

“Black businesses must resist the temptations to retreat and hide their blackness,” Cunningham says.

“This lawsuit is an existential threat to the survival of all Black businesses. The situation demands a bold, courageous, and authentic approach to combat this.”

The suit questions Fearless Fund’s Fearless Strivers Grant Contest, according to Yahoo Finance.

The program awards Black women small business owners $20,000 in grants and digital tools to help them grow.

According to Reuters, lawsuits initiated by another group started by the conservative affirmative action activist Blum led to the Supreme Court’s ruling in June 2023. The lawsuit is reportedly Blum’s first since the ruling by the nation’s highest court.

Blum and the Texas-based American Alliance for Equal Rights have stated some of its roughly 60 members – White and Asian American – have been excluded from the grant program due to their race, based on Street Insider.com.

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