On Monday, Fearless Fund co-founder Ayana Parsons announced that she was stepping down from her executive position at the company. He will not be its general partner and chief operating officer, but will “enjoy life on the island” with his family, she said post on LinkedIn. She co-founded the fund in 2019 with partner Arian Simone, who stays its CEO.
Fearless Fund was founded with a mission to supply enterprise capital financing, grants and financial education to startups founded by Black women. This is a particularly underestimated and promising demographic group. According to Crunchbase data, lower than 1% of all VC dollars in 2023 went to Black-founded startups, accounting for about $661 million of the $136 billion.
So the Fearless Fund does exactly what enterprise capitalists are purported to do: it finds an ignored area (in Silicon Valley they could call it taking a “contrarian view”) and invests. The fund has invested $26 million thus far in greater than 40 corporations, including Slutty Vegan, The Lip Bar, Parttake Foods and Live Tinted, Atlanta Daily World reports.
The invested and committed funds come from private limited partners. The LP partners who backed the fund wish to support this thesis. The corporations receiving the money are still private startups. Because so little traditional VC funding goes to those corporations, the community is building its own tracks. This is positive by everyone in the ecosystem.
Yet a politically conservative group called the American Alliance for Equal Rights (AAER) is suing her over her charitable giving program. AAER is difficult the fund’s right to provide black women a $20,000 small business grant, saying the program violates the Civil Rights Act of 1866, which prohibits consideration of race in contracts.
AAER was founded by Edward Blum, an activist who helped successfully overturn affirmative motion in universities, and is currently pursuing several other lawsuits in a similar vein (for example, AAER is currently suing the Smithsonian Institution’s Latino Museum Studies Program for hiring Latino interns).
Things aren’t going well for the Fearless Fund. As TechCrunch recently reported, an appeals court ruled against Fearless earlier this month. She upheld a preliminary injunction that forestalls the company from providing grants to Black women business owners. The company told TechCrunch at the time that it was considering options for moving forward.
Last 12 months, as the case made national news, multiple founders and investors told TechCrunch about the galling irony of using the Civil Rights Act of 1866 to protest a company program that was initially launched to assist the once enslaved and now it is used against the community it was intended to assist.
In the months that followed, frustration with the case in the community continued unabated. Earlier on 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 surrounded by black women, they’re going to start all over you,” Parsons said. based on Forbes“So when I walked on stage, there were tears in my eyes because I realized how much of a burden we all have in this country.”
After Parsons announced his resignation he told The Atlanta Journal-Constitution. and its spokesperson confirmed to TechCrunch that the lawsuit against Fearless was not a motivating factor. But she didn’t otherwise explain her decision to go away. He also stays an investor in the fund. “As co-founder, Ayana continues to be an investor and has always had multiple ventures centered around inclusive leadership and development, venture capital and entrepreneurship. The Fearless Fund is just one avenue in her quest to be an advocate for the marginalized,” her spokesperson said.
Parsons wrote in her LinkedIn post that she founded the company “to help change the game for women entrepreneurs of color. My rationale was simple: women of color are the most established, but the least funded. They are starting businesses faster than any other demographic, yet they lack access to the capital, resources, education and networks necessary to scale their businesses.”
She also promised that she wouldn’t hand over in achieving her goal. “I remain steadfast in my support and commitment to the advancement of women of color,” she said in an emailed statement, mentioning that she can even be releasing a book soon.
Still, as we have identified before, the sad fact is that the big names in the tech ecosystem have not shown strong support. CEO Simone told Inc. earlier this 12 months that fund she lost just about all of her partnerships except for two, JPMorgan and Costco. Even Mastercard, which sponsored the now-disputed Strivers Grant, has never publicly commented on the lawsuit.
Indeed, support for anything considered DEI has caused a complete pendulum swing in tech in 2024, from its peak in 2020 after the murder of George Floyd. It has now grow to be increasingly fashionable to publicly pander to DEI and extol so-called meritocracy.