On Monday, Fearless Fund co-founder Ayana Parsons announced she was stepping down from her leadership role at the company. She will no longer be his general partner and chief operating officer, but rather she will be “enjoying life on the island” with her family, she said in a LinkedIn post. He co-founded the fund in 2019 with partner Arian Simone, who remains its CEO.
Fearless Fund was founded with the mission of providing venture capital funding, grants, and financial education to startups founded by Black women. This is a particularly underserved and promising demographic. Less than 1% of all venture capital dollars in 2023 went to Black-founded startups, equal to about $661 million out of $136 billion, according to data from Crunchbase.
So Fearless Fund is doing exactly what venture capitalists are supposed to do: find an overlooked area (in Silicon Valley (you might call it taking a “contrarian view”) and invest. So far, the fund has invested 26 million dollars in more than 40 companies including Slutty Vegan, The Lip Bar, Partake Foods and Live Tinted, Atlanta Daily World reports.
The money invested and granted comes from limited companies. The LPs who supported the fund want to support this thesis. The companies that receive money are still private startups. Since these companies receive so little classic venture capital funding, the community is building its own rails. Everyone in this VC ecosystem agrees with this.
Still, it is being sued by a politically conservative group called the American Alliance for Equal Rights (AAER) over its charitable grant program. AAER is challenging the fund's right to provide $20,000 in small business grants to Black women, alleging that the program violates the Civil Rights Act of 1866, which prohibits the use of race in contracts.
AAER was founded by Edward Blum, an activist who helped successfully repeal affirmative action on college campuses and is now pursuing other lawsuits along the same lines. (For example, he is currently suing the Smithsonian Institute's Latino Museum Studies Program for hiring Latino interns.)
The case is not going very well for Fearless Fund. As TechCrunch recently reported, an appeals court ruled against Fearless earlier this month. It upheld a preliminary injunction preventing the company from providing grants to Black women business owners. The company told TechCrunch at the time that it was weighing its options on how to proceed.
Last year, when the case made national news, numerous founders and investors told TechCrunch about the infuriating irony of using the Civil Rights Act of 1866 to protest the company's program, since it was initially implemented to help the formerly enslaved and now applies. being used against the community he sought to help.
In the months since, frustration over this case within the community has not abated. Earlier Monday, Parsons had an emotional moment on stage at the ForbesBLK Summit in Atlanta. She was joined by political leader Stacey Abrams and Congressional Diversity Director Dr. Sesha Joi Moon.
“Any time you're around black women, they invade you,” Parsons said. according to Forbes. “So when I walked on this stage, my eyes were teary because they understood the heavy burden that falls on all of us in this country.”
After announcing his resignation, Parsons told the Atlanta Journal-Constitution that the lawsuit against Fearless was not a motivating factor, but did not otherwise explain his decision to leave. Fearless also did not immediately respond to TechCrunch's request for comment.
Parsons simply said in her LinkedIn post that she founded the company “to help change the game for women of color entrepreneurs. And my reasoning was simple: women of color are the most funded but the least funded. “They are starting businesses at a faster rate than any other demographic group, but they lack access to the capital, resources, education and networks necessary to scale their businesses.”
He also promised not to give up his goal. “Know that in this next chapter of my never-ending story, I will enjoy island life with my amazing family while continuing to fight and embody FREEDOM.”
Still, as we noted above, the sad reality is that the big names in the tech ecosystem have not come out to support it. CEO Simone told Inc. earlier this year that the fund He had lost almost all his associations apart from two, JPMorgan and Costco. Even Mastercard, which sponsored the now-contested Strivers Grant, has never publicly commented on the lawsuit.
In fact, support for anything considered DEI has caused a complete pendulum swing in the technology in 2024, from its peak in 2020 after the murder of George Floyd. These days, it has become more fashionable to publicly criticize DEI and praise so-called “meritocracy.”
