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Twenty years ago, Arian Simone was a college student in Tallahassee, Florida, trying to scrape together money for a small mall-based boutique called Fabulous. “I started to notice that a lot of investors didn’t look like me,” Simone, a Black woman, tells Rolling Stone. “I made a promise to myself to not be concerned about the investor landscape, because one day I was going to be the business investor that I had been looking for.”
Two decades later, the disparity Simone recognized back then persists: According McKinsey and Company, in 2022, Black and Latino founders received just 1 percent of venture capital funds disbursed in the U.S. — 0.1 percent of all funding last year went to female founders who were Black or Latina. At the same time, women of color are starting businesses at a rate that far outpaces every other demographic.
Simone and a friend from college, Ayana Parsons, founded the Fearless Fund to address that gap. Four years into the project, the fund, backed by Bank of America, Ally Bank, MasterCard and others, has invested $26.5 million in more 40 businesses owned by women of color — Fresh Bellies and the cult restaurant chain Slutty Vegan among them — and awarded over $3 million in small grants to 346 businesses.
This weekend, thousands of women will converge on the Woodruff Arts Center in downtown Atlanta for the Fearless Fund’s third annual summit, but this year’s festivities have been overshadowed by a threat to the fund, its founders, and its core mission.
Two weeks ago, the Fearless Fund became the latest target of conservative legal activist Edward Blum, the architect of some of the most high-profile Supreme Court fights over racial equality legislation. Prior to Students for Fair Admissions —the case ended affirmative action in college admissions in June — Blum was the force behind Shelby County v. Holder, the landmark decision gutting the Voting Rights Act.
Shortly after successfully engineering the seismic Supreme Court ruling this summer, Blum, with a new organization called the American Alliance for Equal Rights, set his sights on the Atlanta-based venture capital fund. AAFER filed a lawsuit on August 2, accusing the Fearless Fund of racial bias in private contracts because it offers four $20,000 grants a year to start-ups run by Black women.
The lawsuit builds on Blum’s previous victories, quoting in its opening paragraphs the conservative majority’s recent assertion that “eliminating racial discrimination means eliminating all of it.” Like Blum’s earlier efforts targeting policies designed to address historic injustices like disenfranchisement of Black voters and the exclusion of minorities from prestigious universities, the suit also ignores, dismisses or otherwise minimizes the barriers that groups, Black women entrepreneurs in this case, have consistently faced.
AAFER is suing under the Civil Rights Act of 1866,a law written with the purpose of allowing Black people to enter into the kinds of contracts they had been shut out of before the Civil War. At a press conference earlier this week, Alphonso David, a lawyer representing the fund, called it a “cynical legal theory” advanced by litigants who “want to propagate a system that privileges some, and shuts out most. They want us to pretend that inequities do not exist.”
By email, Blum told Rolling Stone that his organization “was contacted by a woman-owned business who was ineligible to participate in these programs because she was not Black and [is] thus disqualified.” The complaint details the grievances of three plaintiffs, none of whom are named in the document. Blum said he was “unsure” how the women found his organization, which was incorporated in 2021. (He has previously described himself as a matchmaker for aggrieved individuals and the lawyers willing to take on their cases.)
In Blum’s view, the claim is simple: “Would a different venture capital fund’s requirement that only white men are eligible for its funding and support be fair and legal? If the answer is no, then it must follow that racially exclusive policies that target a different race and sex must be unfair and illegal as well,” he wrote.
The practice to which Blum objects is not unusual among venture capital funds. A number of firms target their investments to specific demographics: BBG Ventures invests exclusively in start-ups with at least one woman founder. Gold House Ventures supports Asian and Pacific Islander founders. L’Attitude Ventures focuses its funding on companies owned and led by U.S. Latinos.
When Simone first got the email alerting her to the lawsuit, she thought it was a joke. When she and Parsons realized it wasn’t, they went to work recruiting a team of lawyers, including David and Ben Crump, the civil rights attorney known for representing the families of Trayvon Martin, Breonna Taylor, Michael Brown and George Floyd.
At a press conference earlier this week, Simone and Parsons declared they wouldn’t back down from the fight. “I grew up around Coretta Scott King, Rosa Parks, Juanita Abernathy and Betty Shabazz,” Simone told reporters. “Activism is in our DNA. I’m the daughter of a mother who won the largest discrimination case in the state of Michigan… I’ve led protests for justice, against discrimination in my elementary school, as a 10 year old.”
“We are not scared,” she said. “We are fearless.”
