Story updated on Monday, Oct. 2: On Saturday, federal appellate judges temporarily blocked an Atlanta-based venture fund from awarding $20,000 grants to Black female entrepreneurs.
We came to ATL to stand against those who seek to undo generations of hard-won civil rights, because this country needs to move forward on equality – not backward…Today, I’m proud to have stood w/ #FearlessFund in that courtroom as the judge denied the preliminary injunction. pic.twitter.com/XB91HuRUcH
— Reverend Al Sharpton (@TheRevAl) September 27, 2023
Original Story: A federal judge in Atlanta recently ruled that an Atlanta venture capital firm can continue lending out funds to Black women entrepreneurs, blocking a lawsuit by an anti-affirmative action group.
Ruled in a hearing on Thursday, U.S. District Judge Thomas Thrash denied the filing by the American Alliance for Equal Rights that demanded a preliminary injunction against venture capital fund Fearless Fund.
The anti-affirmative action group’s request was made in an attempt to prevent the Fearless Fund from giving grants only to Black women. Originally, the group, led by the anti-affirmative action conservative Edward Blum, filed to temporarily block the program, claiming it was “racially exclusive.”
After the court deemed that they would write a decision later, the group filed an emergency appeal to prevent the venture capital firm’s Saturday deadline for this year’s grants applications from closing.
In his final decision, Thrash declared that the Fearless Fund’s initiative is protected as a form of speech under the Constitution’s First Amendment.
In a joint statement, the founders of the Fearless Fund, Arian Simone and Ayana Parsons, praised Thrash’s decision.
“The foundation and the incredible work that we have done will continue to go on as we continue to be covered,” said Parsons at a press conference. “Thank you for investing in us and investing in women of color so we that can do this incredible work.”
Founded by Simone and Parsons in 2018, the venture capital firm has been successful in funding businesses by Black women entrepreneurs throughout the years. Through offering over 300 grants, the firm has awarded over 1,000 Black women with more than three million dollars in monetary aid to open and continue running their businesses.
Overall, Black women entrepreneurs are amongst the leaders who are the most underfunded. Although the number of Black women-owned businesses is on the rise, the amount of VC funding the entrepreneurs can secure is declining.
According to a report released earlier this year by Crunchbase, Black entrepreneurs in general get less than 2% of venture capital funding; Black women are even more underfunded, earning less than 1% in funds for their businesses.
Although there was an increase in funding for Black-led businesses in 2021 following the Black Lives Matter protests, as overall venture capital funds decreased by 36% due to issues such as inflation, Black-led businesses were amongst those who were most affected.
Overall, finances for Black-led businesses decreased by 45% just a year after they increased.
“The reality is that Black women and women of color are significantly under-resourced in advancing their business endeavors,” said Alphonso David, the counsel to the Fearless Fund and the CEO of the Global Black Economic Forum, in a statement. “There is no law that restricts grants from being issued to women of color or Black women, particularly in light of this disparity. We are pleased with this result.”
