*A group founded by the man who led the fight to end affirmative action in higher education has filed a lawsuit against Fearless Fund, a venture capital firm that invests in Black female entrepreneurs.
Edward Blum, the founder of Students for Fair Admissions, the group behind the anti-affirmative action case that reached the Supreme Court, is suing the fund, ABC News reports. The conservative organization argues that the fund is “operating a racially discriminatory program that blatantly violates Section 1981’s guarantee of race neutrality.”
Applicants who win the Fearless Strivers Grant Contest receive $20,000 grants. According to the lawsuit, the program is “open only to Black females.”
Race discrimination is prohibited by Section 1981 in contract making and enforcement. American Alliance for Equal Rights argues “the submission of an entry forms ‘a contract’ between Fearless Fund and the applicant,” according to the complaint.
“The program being challenged is racially exclusive, thus violating our nation’s civil rights laws,” Blum told TechCrunch+. “It is to be hoped that other programs like this one end these practices and offer the benefits to all small businesses regardless of the owner’s race.”
Ayana Parsons, the co-partner of Fearless Fund, said the goal of the initiative is to help Black female entrepreneurs gain access to capital and resources.
“When we set out to start we had one clear vision in mind, and that was to change the game for women of color,” said Parson. “Our rationale was simple. These women are the most founded, yet the least funded. They’re starting businesses at a much higher rate than any other demographic. Yet they lack access to capital, access to resources, access to networks,” she continued.
The fund, which was founded in 2019, addresses the wide gap in venture capital funding for Black female business owners “who confront barrier after barrier to obtain support and investments for their businesses.”
“They want us to pretend that inequalities do not exist. They want us to deny our history,” said Alphonso David, co-counsel of the Global Black Economic Forum. “Their cynical legal theory is based on a law that was passed in 1866 after the Civil War. A law that was created to allow Black people to enter into contracts, when they had been denied that ability for decades.”
The Fearless Fund partners argue that women of color are underrepresented among venture capital recipients due to bias.
“Our vision is to promote a global society where marginalized and underrepresented communities are empowered with unbiased access to the resources and assistance that are critical to achieving business success,” the fund said in a statement to ABC News.
Crunchbase reports that women received only 2.3% of venture capital funding in 2020. Women of color make up a smaller percentage of that number.
In 2021, Black women received a total of .35% of venture capital in the U.S., according to Crunchbase.
READ MORE: Elevating the Entrepreneurial Spirit: Miami-Dade County to Kick off Black Business Month
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