Fearless Fund Drops Grant Program for Black Women in Lawsuit Settlement – urbangeekz

The Atlanta-based venture capital firm sued by the American Alliance for Equal Rights (AAER) has decided on a settlement agreement. AAER, run by conservative activist Edward Blum, alleged that the Strivers Grant program discriminated against non-Black founders and violated the Civil Rights Act of 1866. 

Flashback on the Lawsuit Against Fearless Fund

Fearless Fund’s Strivers Grant program, sponsored by Mastercard, gave $20,000 to small businesses owned by Black women.

In August 2023, AAER sued Fearless Fund, claiming the Strivers Grant violated the Civil Rights Act of 1866 by excluding white founders. The Act was initially designed to protect formerly enslaved people and prohibits racial discrimination in contracts. 

Related Post: Court Blocks Fearless Fund From Awarding $20K Grants to Black Women Founders

Initially, U.S. District Judge Thomas W. Thrash favored the Fearless Fund, labeling its actions as charitable giving and thus protecting them under the provisions of the First Amendment. However, the venture capital firm’s victory was short-lived. 

On Sept. 30, 2023, the U.S. Court of Appeals for the 11th Circuit approved a temporary injection filed by Blum that barred Fearless Fund from awarding grant funding. In June 2024, a court ruled that the program likely violated the law, leading to a preliminary injunction.

Blum, president of AAER, said, “The American Alliance for Equal Rights encouraged the Fearless Fund to open its grant contest to Hispanic, Asian, Native American, and white women, but Fearless has decided instead to end it entirely.”

“Race-exclusive programs like the one the Fearless Fund promoted are divisive and illegal,” he added.

What the Fearless Fund Lawsuit Could Mean for DEI

The result of this lawsuit could set a lasting precedent for how the startup ecosystem evolves. The Strivers Grant program was created to address the gap in funding and opportunities faced by black founders by providing $20,000 grants to Black women entrepreneurs.

However, closing this grant program is the latest blow to this year’s diversity, equity, and inclusion movement. Several DEI tech foundations have closed down, and companies are refocusing initiatives that once benefited underserved communities. 

Blum and other conservative activists have been successful in suing away similar programs. Most notably, he helped end the use of race in college admissions, and his non-profit, AAER, is currently suing other race-based programs, such as the Smithsonian Institute’s Latino Museum Studies Program, for focusing on hiring Latino interns. 

Although Fearless Fund lost nearly all of its partnerships after the lawsuit, Rachel Noerdlinger, a firm representative, told TechCrunch that Simone plans to announce a $200 million debt fund for those needing financing.

In an emailed statement, Fearless Fund’s CEO, Arian Simone, said, “The Fearless Fund and the Fearless Foundation are pleased to end the case and continue to focus on helping under-resourced entrepreneurs who have been ill-served by traditional capital markets for far too long.” 

“From the moment the lawsuit was filed, I pledged to stand firm in helping and empowering women of color entrepreneurs in need. I stand by that pledge today, and my commitment remains stronger than ever,” Simone continued.