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Remaining fearless as racism mounts against minority-led VC funds

As conservative groups attack The Fearless Fund and minority-led venture capital, hope can be found in the surrounding support systems

Emma Grede and Fearless Fund co-founder Arian Simone speak during the Fearless Fund Third Annual Fearless Venture Capital Summit, August 18, 2023 in Atlanta, Georgia.Prince Williams/WireImage

Since August, conservative nonprofit American Alliance for Equal Rights (AAER) and its founder, Edward Blum, have waged an ongoing legal assault against The Fearless Fund and its founders, Arian Simone and Ayana Parsons. The Fearless Fund, a venture capital (VC) group “built by women of color for women of color,” is being targeted for legal harassment by forces very similar to those that challenged Black Girls Code, the program I founded to bring more young women of color into STEM and tech fields.

In fall 2019, I received an urgent call from the Campus Activities Team at Wayne State University in Detroit, Michigan. The call came with a request to review our student records from the STEM programs we facilitated to empower Black and Brown girls at the university the previous summer.

Wayne State University — and, by extension, the very foundation of our partnership — found themselves facing an improbable opponent in our shared pursuit of social good via teaching girls of color how to code and creating more equity and access within the tech industry. Mark Perry, an economics professor at the University of Michigan-Flint, had lodged a discrimination complaint with the Department of Education. His claims, which reverberated like a shockwave across the nonprofit sector, asserted that the support of race- and gender-based STEM initiatives, like the ones Black Girls Code championed, amounted to unfair bias against men. The complaint alleged a violation of Title IX, the federal law passed in 1972 to ensure that students and employees in educational settings are treated equally and fairly regardless of gender.

Following these allegations, my team and I were forced to redirect our focus away from our program work. We spent weeks developing reports to justify the impact and importance of creating STEM pathways for young Black and Brown girls within an industry where they comprised less than 3% of the technical workforce. Although our program and partnership weathered this storm, the threat put a strain on an already stretched nonprofit budget and impacted how gender-focused STEM programs would be both funded and supported by university partners.

For Black Girls Code, this challenge shined an unwarranted negative glare on a program that, while radically centered on Black girls, was also always open to students from many communities, including the occasional appearance of boys in many of our virtual, in-school, partner and international programs. This attack on our work left our team depleted and cautious as we moved forward with future programs.

So I can imagine how exhausted and angry the leaders of the Fearless Fund must be. And AAER’s recent Supreme Court victory in the landmark case striking down affirmative action in college admissions has only emboldened Blum and those of his ilk.

This victory is already creating a ripple effect in other minority preference programs. Most recently, a decision by a federal court in Tennessee ruled against minority businesses using “social disadvantage” to qualify for the Small Business Administration’s 8(a) Business Development Program, disrupting a government initiative that was utilized for more than five decades.

In many ways, the VC industry suffers from the same disparities in access that led to the creation of programs like SBA 8(A). A look at investment data exposes glaring and stark discrepancies in Blum’s flawed argument of unfair advantage. For instance, in 2021, less than 1% of the staggering $420 billion of VC funding was allocated to women-led ventures. Merely 1.2% was directed toward Black startup founders, with a paltry 0.34% invested in Black women.

The VC landscape in the U.S. contributes 41% of the nation’s market capitalization, which equates to a significant portion of domestic GDP and business growth. While the number of businesses that ultimately receive VC investment is small relative to the total created in the U.S. each year (roughly 1 in 500), the ramifications of such investment reverberate far beyond individual enterprises.

Although Black women are the “most founded” entrepreneurial demographic, according to Crunchbase, they are chronically the least funded by VC and forced to rely on grants and alternate mechanisms for seed capital. The Fearless Fund — in particular, its Strivers Grant program — aims to “bridge the gap in venture capital funding for Black founders building scalable, growth aggressive companies.”

It’s telling that Blum’s organization employs the sort of divisive strategy that sows discord by mobilizing one marginalized community against another in its attempts to undermine progressive DEI initiatives.

In his most recent legal challenge against The Fearless Fund, Blum has enlisted Asian women as plaintiffs, mirroring the approach he took in the Harvard case. This recurring tactic, seen throughout history, aims to pit marginalized communities against each other, ultimately hindering collective progress. In the broader context, it’s worth noting that women, regardless of their ethnic background, receive only about 2% of VC dollars, further underscoring the need for initiatives like The Fearless Fund.

While these challenges are formidable, they are not insurmountable. Though the Strivers Grant was temporarily blocked by a federal appeals court this week, the grassroots pushback against these divisive efforts is heartening. This includes the All for One open letter signed by leaders at 70 VC funds in mid-August, shortly after the suit was filed, and the formation of the Council for Economic Opportunity and Social Justice, a coalition of 13 civil rights organizations that will support organizations targeted by AAER’s type of legal maneuvering, in early September.

Along with fighting back, the business and philanthropic community should also enhance their support for organizations like The Fearless Fund and others that are working to diversify the landscape. Now more than ever there is an urgency to bring forth a united offensive to the forces hellbent on dismantling and diminishing the efforts to create a level playing field for marginalized and disadvantaged founders.

“Lawsuits are designed not for victory, but for chilling effect. And the chilling effect is when you decide to unilaterally disarm for fear of being attacked,” Stacey Abrams said at September’s Fortune Impact Initiative Conference in Atlanta.

Those of us working toward a better future for Black entrepreneurs won’t be chilled into inaction. Together, we can ensure those dreams remain fearless for all.

Kimberly Bryant is the founder of both ASCEND Ventures and Black Girls Code. She is also a Public Voices fellow on Advancing the Rights of Women and Girls with The OpEd Project and Equality Now.