Judge Upholds Black Women-led VC Firm’s Right to Support Black Women Entrepreneurs

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A conservative group’s request for an injunction to impede an Atlanta-based, Black women-operated venture capitalist firm from awarding grants solely to Black women entrepreneurs was recently denied by a federal judge. The American Alliance for Equal Rights (AAER) insisted that the grant program run by the Fearless Fund promotes racial discrimination, a direct opposition to the Civil Rights Act of 1866.

The denial for the preliminary injunction was issued by Judge Thomas Thrash Jr., Senior U.S. District Judge of Northern District of Georgia. The Judge clarified the case as being concerned with the free speech domain, thereby suggesting that charitable donations fall under the First Amendment protections.

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Following the ruling, Fearless Fund co-founder and CEO Arian Simone expressed gratitude, citing the verdict as the maintenance of laws intended to provide protection and respect for progress and free speech.

However, AAER expressed disappointment over the outcome and has since appealed the decision. Citing a principle of non-discrimination, AAER founder Edward Blum emphasized that civil rights laws do not warrant racial distinctions based on over or under-representation.

Fearless Fund, established in 2019, aims to dismantle barriers preventing black women from accessing resources essential for their business growth. Ayana Parsons, co-founder and Chief Operating Officer, delineated that the company—designed “by women of color, for women of color”—also operates a non-profit arm. Known as the Fearless Foundation, it donates grants to women-of-color entrepreneurs.

Fearless Foundation’s Strivers Grant Contest, which exclusive awards between $20,000 to Black women entrepreneurs, became the focal point of AAER’s grievance. The judge, while concluding the hearing stated that Fearless Fund is tackling the disparity in capital access for Black women, a message plaintiff AAER wants to change. The case now moves onto its main trial sessions in Northern District post-denial of the injunction request.

According to civil rights activist and leader Rev. Al Sharpton, this lawsuit signals the extension of the affirmative action discourse beyond education. The AAER’s failed injunction bid saw Sharpton standing in solidarity with Fearless Fund’s founders outside the federal courthouse. Echoing the sentiment that this lawsuit goes beyond venture capital, Parsons highlights the magnitude of the situation and the impact it holds on diversity, equity, and inclusion.

Fearless Foundation beneficiaries like Sophia Danner-Okotie testify to the need for specialized funding avenues for entrepreneurs of color. The Foundation’s support boosted not just her business, but her confidence. While the denial of the preliminary injunction does mark a win for Fearless fund, the legal battle against AAER continues.