Fearless Fund, a venture capital firm dedicated to investing in women entrepreneurs of color, has settled a discrimination lawsuit concerning its grant program exclusively for Black women.
The lawsuit, filed by the American Alliance for Equal Rights (AAER), alleged that the Fearless Strivers Grant Contest, which was restricted to Black women, was discriminatory.
According to Fearless Fund founder Arian Simone, the grant program had already reached its conclusion by the time the lawsuit began in 2023. The fund chose to settle the case to avoid a court ruling that could potentially lead to a Supreme Court decision affecting minority-focused funding nationwide.
In response to the settlement, Fearless Fund reaffirmed its commitment to supporting “under-resourced entrepreneurs who have been underserved by traditional capital markets.” It also announced a new $200 million debt fund aimed at providing loans to more than 3,000 under-resourced business founders.
Fearless Fund founders Arian Simone and Ayana Parsons emphasized in August 2023 that the fund was established to address the significant funding gap faced by women of color entrepreneurs, who often encounter numerous barriers when seeking investment for their businesses.
The Fearless Strivers Grant Contest was specifically created to support Black women, a group that receives less than 1% of venture capital funding, according to the organization.
AAER criticized the program as “divisive and illegal,” suggesting that Fearless Fund should have expanded the contest to include Hispanic, Asian, Native American, and white women. Instead, Fearless Fund opted to discontinue the program altogether.
Data from BBG Ventures and Crunchbase highlights the disparity in funding, showing that white women-founded companies receive 64% of diversity investments, while businesses owned by women of color receive only 10%.
Fearless Fund’s leaders have consistently defended their mission, pointing to the lack of representation for women of color in venture capital and evidence of racial bias in investment decisions.
“When the lawsuit was filed, I vowed to continue supporting women of color entrepreneurs, and I stand by that commitment,” said co-founder Arian Simone. “Our mission remains to empower entrepreneurs who have historically been overlooked in the venture capital industry.”
AAER’s founder, Edward Blum, also leads Students for Fair Admissions, the organization that spearheaded the anti-affirmative action case that reached the Supreme Court and resulted in new limitations on race-based policies in college admissions.
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The conservative group argued that affirmative action, designed to address racial disparities in higher education access, violated the equal protection clause of the 14th Amendment.
