The Fearless Fund – a venture capital firm that awards funding to women of color-led businesses – suffered a setback in their ongoing lawsuit against affirmative action for Edward Blum and his non-profit, the American Alliance for Equal Rights (AAER).
On Sept. 30, the United States Court of Appeals for the 11th Circuit granted Blum and the AAER’s emergency motion to temporarily block the Fearless Fund from executing their Strivers Grant Contest— which awards a $20,000 grant and mentorship to Black women-led founders, helping them to grow and expand their businesses.
In the appeal — which was issued in Georgia — Judge Robert Luck and Andrew Brasher of the appeals court sided with Blum and the AAER, arguing that the Fearless Fund’s “racially exclusionary program” was “substantially likely to violate” section 1981 of the Civil Rights Act of 1866.
The federal law prohibits discrimination on the basis of race, color and ethnicity when making and enforcing contracts. The application was set to close on Saturday, but after the appeal received a 2-1 vote, the grant contest was temporarily halted, according to Reuters.
Jason Schwartz, a lawyer representing the Fearless Fund, said the verdict would not stop the firm’s commitment to end financial discrepancies against women of color in the venture capital industry.
“We remain committed to defending our clients’ meaningful work,” Schwartz said.
As MadameNoire previously reported, on Aug. 2, Blum’s non-profit filed a lawsuit in the U.S. District Court of Atlanta, where it accused the firm of “operating a racially-discriminatory program that blatantly violates” section 1981’s guarantee of race neutrality under the Civil Rights Act of 1866.
The Alliance claimed that the fund’s Strivers Grant Contest excluded eligible Asian and white candidates because of their race. Blum— an anti-affirmative action activist— was a prominent voice behind the Supreme Court case that led to the dismantling of the race-based college admission policy in June.
CEO Arian Simone and her partner Ayana Parsons founded the Fearless Fund in 2019. Since the firm’s inception, the duo has invested over $26 million in investment capital to women of color founders and has awarded over $4 million in grant dollars to WOC-led businesses. The firm aims to “bridge the gap” in venture capital funding for WOC founders.
The appeal comes just a few days after the Fearless Fund won the first round of their ongoing legal battle against the conservative activist and his non-profit. On Sept. 26. Simone and Parsons celebrated after U.S. District Judge Thomas Thrash rejected Blum’s preliminary injunction to block the Fearless Fund from exclusively awarding funds to Black women-led businesses.
During the hearing, Thrash argued that Simone and Parsons’ venture capitalist firm did not violate free speech protections granted under the First Amendment. Thrash claimed that the business titans were well within their right to express the importance of Black women-led businesses and their need for venture capitalist funding through their grant program and other initiatives.
However, Luck and Brasher — two judges formerly appointed under the Trump Administration — claimed that the First Amendment did not give the firm the right to “exclude persons from a contractual regime based on race.”
During an interview on the Earn Your Leisure podcast Sept. 25, Simone called Blum and AAER out for their blatant attempt to “stop diversity” and “equity inclusion funding” across corporate America.
“They are trying to instill fear to stop millions and billions of dollars from getting in the hands of people of color, male and female, as well as women. And it’s honestly just quite disturbing,” the celebrity publicist said. “They are trying to use us as a baseline case, to say, if we can set precedent here by knocking them off—we can go get everybody else.”
Listen to the full clip below.
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