Arian Simone, co-Founder of the Fearless Fund, speaks onstage during AfroTech Executive Brooklyn at William Vale Hotel Williamsburg on September 22, 2023, in Brooklyn, New York. (Photo by Bennett Raglin/Getty Images for Blavity)
Quality Journalism for Critical Times
On June 2, a three-member panel of the U.S. Court of Appeals for the Eleventh Circuit ruled that the Fearless Fund — a Black-woman owned venture capital firm in Atlanta — violated the 1866 Civil Rights Act by awarding monetary grants to qualified Black women.
In a mind-blowing ruling, two of the three judges declared that grants disbursed by the nonprofit arm of the Fearless Fund “likely violated the federal Civil Rights Act of 1866,” casting doubt on the future of diversity, equity and inclusion (DEI) programs across the country.
The judges said the fund “was unlikely to enjoy First Amendment protection and that its program inflicts irreparable harm on the plaintiffs, an anonymous group of three white and Asian women,” as described by Fearless Fund attorney Alphonso David.
The judges chose to ignore the damage that centuries or racism, discrimination, and exclusion has inflicted on African Americans.
“Black and brown women received 0.39% of all venture capital funded, although we are 20% of the U.S. population. Of the entrepreneurial demographic, they are the least funded.” said Fearless Fund CEO and Founder Arian Simone.
“We founded the Fearless Fund to solve racial disparities. We were told that we violated the 1866 law, which was put in place to protect us and give us some level of economic freedom. They’re saying you must give your money to white men. It’s beyond disturbing … it doesn’t make sense.”
‘Small infusions of money’
Simone, an angel investor, entrepreneur, philanthropist, author, and PR and marketing specialist, said the fund gives grants of between $20,000 and $30,000 to each woman chosen, although it has made some seven-figure investments, she said, explaining that the grants are “small infusions of money to help with job creation, marketing, and cashflow management.”
“These women are on Forbes Inc.’s List — they are phenomenal and past deserving. Who has been harmed?” Simone asked during an appearance on MSNBC.
This court ruling is in direct conflict with the stated aims of diversity, equity, and inclusion programs — and a slap in face to Simone and her colleague, co-founder and general partner Ayana Parsons.
Despite the firm’s work to even the scales in favor of Black female businessowners, the court has ruled that the Fearless Fund must give money to white men even though white men as a group already receive 99% of funding.
Simone issued a statement in reaction to the ruling.
“In this fearless moment, we should all be motivated to fight after today’s decision. This is devastating for the Fearless Fund and Foundation, and for the women in which we have invested,” she said.
“I am shattered for every girl of color who has a dream but will grow up in a nation determined not to give her a shot to live it. On their behalf, we will turn the pain into purpose and fight with all our might. America is supposed to be a nation where one has the freedom to achieve, the freedom to earn, and the freedom to prosper. Yet, when we have attempted to level the playing field for underrepresented groups, our freedoms were stifled.”
The numbers
The need for programs like the Fearless Fund is borne out by the numbers.
According to nonprofit advocacy group digitalundivided, less than 1% of venture capital goes to businesses owned by Black and Hispanic women.
Meanwhile, “only 2% of investment professionals at venture capital firms were Black women in 2022, according to a study conducted every two years by Deloitte and Venture Forward, the nonprofit arm of the National Venture Capital Association, and the consulting firm Deloitte,” the Associated Press reported.
Just 1% of investment partners were Black women, the news agency said.
The Fearless Fund has directed more than $30 million to more than 41 enterprises run by women of color and empowered these marginalized people to reach and exceed their full potentials.
I agree with Simone that the lawsuit brought by Edward Blum and the American Alliance for Equal Rights is part of an anti-America campaign focused on reversing equal rights and the hard-earned gains made by African Americans.
This latest judicial setback is the most recent in a culture war waged by Gov. Ron DeSantis, his ideological toady Christopher Rufo, and other extremist Republicans in what amounts to a multi-pronged national conservative mugging of DEI.
DEI serves as a proxy for Republicans extremists intent on the systematic disenfranchisement of African Americans in education, business, the workplace, and just about every aspect of their lives.
Defenders of the status quo love to pretend that racism doesn’t exist, and they insult African Americans and others by their refusal to acknowledge the deeply corrosive effects of structural barriers, the intolerance, virulent racism, bias, and stolen opportunities that bigotry and discrimination engender.
But as Morgan Simon notes in a Forbes analysis, the ruling “is just the tip of the iceberg of a broader vision certain legal activists have for society at large, one that brushes racial inequity under our collective rug.”
Economic foundation
I applaud Simone and Parsons for developing a model to build a strong economic foundation for Black and brown women. But these women understand that they can’t climb this mountain alone. They had corporate investors including Bank of America, Carta, The Jump Fund, and JPMorganChase.
Since the rash of lawsuits and legal challenges, a number of the institutions and businesses that support DEI have been knocked off-balance or scared off.
DeSantis is knee-deep in all this, using his office to dismantle DEI in Florida. Last May, the governor signed a bill into law that bans Florida’s public colleges and universities from spending money on diversity, equity, and inclusion programs.
“If you look at the way this has actually been implemented across the country, DEI is better viewed as standing for discrimination, exclusion, and indoctrination. And that has no place in our public institutions,” DeSantis told reporters at a news conference at the time.
While college administrators argue their so-called DEI efforts represent an effective strategy to repair decades of exclusionary practices; Republican leaders insist they violate free speech, break antidiscrimination laws, and misuse public money.
According to the National Education Association, more than a dozen states have passed anti-DEI laws, including Florida, Texas, North Carolina, North Dakota, Tennessee, and Utah. These laws have forced the shuttering of multicultural and LGBTQ+ centers and have hobbled college staff working on issues such as financial aid and against sexual assault. At least 24 states are considering doing the same.
George Floyd effect
According to a report from the World Economic Forum, companies across the nation pledged donations to Black organizations and vowed to support Black-owned businesses following George Floyd’s murder by a Minneapolis police officer in 2020.
“This tragedy served as a catalyst for increased financial support for Black entrepreneurs, with a reported $850 million to $1.2 billion in VC investments directed towards Black-founded startups in 2020,” the report said.
Since then, however, venture capital funding to Black founded companies sank as the images of the Floyd killing faded, donor fatigue took hold, and many in the mainstream questioned the need to correct systemic inequities they say they didn’t create or benefit from.
“Venture capital investments in Black-founded startups plummeted by 45% in 2022,” the report said.
We are only 70 years removed from a centuries-old American apartheid system. Seventy years of a semblance of freedom. But there are those who still dehumanize African Americans and bolster systems that methodically deny oppressed Black people access to good jobs, businesses, quality education, housing, and the freedom to vote.
In 2024, Black people have nothing to lose. They may as well go for broke.
They have to first acknowledge the reality that African Americans were never considered in the American calculus. Which means that they have to think outside the box, as Simone and Parsons have.
More people need to make sacrifices to become financially literate, buy land, and grow wealth. They must use all the mechanisms available to secure those things they need. That includes becoming more intentional in using their $1.6 trillion in spending power not for baubles but to finance a range of start-ups, venture capital projects, job creators, businesspeople, businesses, and development projects.
Billions of dollars
I am no economist, but imagine if, as a group, Black people in America opted out of international and domestic travel for one year. Doing that would allow them to amass about $109.4 billion.
Imagine what they could do with this pot. They could fund venture capital and start-up projects, create a slew of businesses to cater not just Black people but to any consumers needing those services, build apartment buildings, homes, hotels, convention centers, meeting spaces and ancillary projects.
I’ve been stuck on the hospitality sphere because of the myriad possibilities. The money saved could pay for architects, construction engineers, and other professions. Most importantly, the money could be used to set up programs to train and hire hotel employees at every level, as well as managers, desk clerks, electricians, and engineers.
Sounds like one hell of a plan.
But wait.
Ed Blum and the rest of those tight ass party poopers would probably go to court to try to convince judges that it’s unconstitutional for Black people to save all that money without making sure that white men and women were intimately involved and, of course, got their cut. For no other reason than their race.
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