NEW YORK, NY – SEPTEMBER 20: Civil Rights Attorney, Ben Crump and Arian Simone, founder of Fearless Fund, at GMA 3 to discuss the discrimination suit against on venture capitalist ‘Fearless Fund’, by conservative activists over alleged racial bias on September 20, 2023 in New York City (Credit: RW/MediaPunch /IPX).
A venture capital firm founded by Black women kept a case away from the U.S. Supreme Court that could have ended race-based entrepreneurial funding nationwide.
The Atlanta-based Fearless Fund settled a lawsuit Wednesday with the American Alliance for Equal Rights — the same conservative advocacy group responsible for bringing the case that ended affirmative action programs in college admissions.
Conservative activist Edward Blum, founder of the Alliance, brought a legal challenge against the Fearless Fund, an entrepreneurship funding competition open only to businesses owned by Black women. The program offered $20,000 to each of four winners in an effort to help Black women build growth within the venture capital industry. To be eligible, a business must be at least 50% owned by Black women.
Blum and three unnamed non-Black business owners alleged that the contest’s rules constituted a civil rights violation. In June, two Donald Trump-appointed judges of the U.S. Court of Appeals for the 11th Circuit sided with Blum and issued a preliminary injunction against the program.
A third judge, U.S. Circuit Judge Robin Rosenbaum, a Barack Obama appointee, dissented from the ruling and wrote a scathing opinion in which she likened Blum’s lawsuit to soccer players who fake an injury by “flopping on the field.”
Had the Fearless Fund appealed the ruling, the next step would be seeking intervention from the U.S. Supreme Court, thereby giving the justices an opportunity to broaden their anti-affirmative action jurisprudence.
The justices ruled in June 2023 that race-conscious admissions programs at Harvard University and the University of North Carolina violated the Equal Protection Clause of the Fourteenth Amendment of the Constitution. Since the decision, Harvard has reported that the proportion of Black students has fallen by four percent, while some other schools have reported a more dramatic decline.
Rather than appealing the 11th Circuit’s ruling, the Fearless Fund settled the lawsuit Wednesday via the filing of a joint motion to dismiss the case with prejudice. The resolution means that the Alliance cannot sue over the grant contest again. The terms of the settlement agreement have not been disclosed.
Renowned civil rights attorney Ben Crump, who represented the Fearless Fund in the lawsuit, said in a statement Wednesday, “By strategically avoiding a Supreme Court ruling that could have eliminated race-based funding, we protected vital opportunities for the entire Black and brown community.”
“This victory ensures that programs dedicated to uplifting underrepresented entrepreneurs remain intact and continue to serve their critical purpose.” Crump continued. “I am proud to have stood with the Fearless Fund in this fight for economic justice and will continue to support efforts that promote fairness and inclusion.”
Crump’s statement also announced a $200 million debt loan program aimed specifically at supporting under-resourced entrepreneurs.
Fearless Fund CEO and co-founder Arian Simone said in a statement Wednesday, “The Fearless Fund and Fearless Foundation will continue to be a vital resource to ensure everyone has a fair shot at the American Dream.”
Blum issued a statement Wednesday that said the Alliance “encouraged” the Fearless Fund to open its grant contest to women of other races, but that the fund opted to end the program instead.
“Race-exclusive programs like the one the Fearless Fund promoted are divisive and illegal,” Blum added. “Opening grant programs to all applicants, regardless of their race, is enshrined in our nation’s civil rights laws and supported by significant majorities of all Americans.”
The Alliance is also suing at least nine other entities, including Southwest Airlines, multiple law firms, and the governors of Minnesota and Alabama, seeking to end race-conscious programs.
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