On Monday, the founder of Fearless Fund, Ayana Parsons, announced that she is stepping down as the leader of the company. He will no longer be general partner and COO, but will “enjoy island life” with his family, he said in a LinkedIn post. He founded the fund in 2019 with partner Arian Simone, who remains as CEO.
Fearless Fund was founded with a mission to provide venture capital funding, grants and financial education to startups founded by black women. This is an underserved and promising demographic. Less than 1% of all VC dollars in 2023 went to Black-founded startups, which is about $661 million out of $136 billion, according to Crunchbase data.
So Fearless Fund does exactly what venture capitalists are supposed to do: find neglected areas (in Silicon Valley (you could call it taking a “contra view”) and invest in them. including Slutty Vegan, The Lip Bar, Partake Foods, and Live Tinted, Atlanta Daily World reports.
Money invested and provided by private limited partners. The LPs who support the fund will support this thesis. Companies that receive money are still private startups. Since the classic VC funding for these businesses is very small, the community creates its own rails. Everyone in the VC ecosystem is ok with this.
However, it was sued by a politically conservative group called the American Alliance for Equal Rights (AAER) over the charitable grant program. AAER challenged the fund’s right to provide $20,000 in small business grants to black women claiming the program violated the Civil Rights Act of 1866, which prohibited the use of race in contracts.
AAER was founded by Edward Blum, an activist who helped successfully repeal affirmative action at universities and is now pursuing several other lawsuits along the same lines. (For example, the Smithsonian Institution’s Latino Museum Studies Program is currently demanding that it hire Latino interns.)
The case is not looking too good for the Fearless Fund. As TechCrunch recently reported, earlier this month an appeals court ruled against Fearless. It upheld the preliminary injunction that prevented the firm from giving to black women business owners. The company told TechCrunch at the time it was considering options on how to proceed.
Last year, when the case made national news, many of the founders and investors told TechCrunch about the amazing irony of using the Civil Rights Act of 1866 to protest the company’s program, since it was originally put in place to help people who were once slaves, and now are used against the community they helped.
In the following months, the frustration of this case in the community did not decrease. Earlier on Monday, Parsons was overcome with emotion on stage at the ForbesBLK Summit in Atlanta. He was joined by political leader Stacey Abrams and the chief diversity officer of Congress, Dr. Sesha Joi Moon.
“Anytime you’re surrounded by black women, they’re going to put you down,” Parsons said, according to Forbes. “So, when I walk on this stage, these eyes tremble because they know the heavy burden that all of us carry in this country.”
After announcing his resignation, Parsons told The Atlanta Journal-Constitution that the lawsuit against Fearless was not a motivating factor, but he did not explain his decision to leave. Fearless also did not immediately respond to TechCrunch’s request for comment.
Parsons only said in a LinkedIn post that she founded the company “to help change the game for women of color entrepreneurs. And my reason is simple: women of color are the most founded but least funded. They start businesses at a faster rate than other demographics but lack access to the capital, resources, education and networks needed to scale a business.
He also promised not to give up on his goal. “Know that, in the next chapter of my never-ending story, I will enjoy island life with my amazing family as I continue to fight and create FREEDOM.”
Still, as I mentioned earlier, the sad reality is that the big names in the tech ecosystem have not come out with support. CEO Simone told Inc. the beginning of the year that fund has lost almost all partnerships aside from two, JPMorgan and Costco. Even Mastercard, which sponsors the Strivers Grant that is now being contested, has not commented on the lawsuit.
Indeed, support for anything DEI considers has done a full pendulum swing in technology by 2024, starting from a high in 2020 after the killing of George Floyd. Today, it is becoming more popular to open DEI publicly and praise the so-called “meritocracy”.
