Ayana Parsons, Fearless Fund cofounder, announced on Monday that she would be stepping down as the firm’s leader. She will no long be its general partner or COO, but will be “enjoying the island life” with family. She said in an LinkedIn post . She co-founded this fund in 2019 along with Arian Simone who remains the CEO.
Fearless Fund’s mission was to provide venture capital funding, grants, and financial education for startups founded by Black Women. This is a demographic which is both underserved as well as promising. Crunchbase data shows that less than 1% of VC dollars will be allocated to Black-founded companies in 2023. This amounts around $661,000,000 out of $136 billion.
Fearless Fund has invested $26 million into over 40 companies, including Slutty Vegan, The Lip Bar, Partake Foods, and Live Tinted. The fund has invested $26 millions into over 40 companies, including Slutty Vegan and The Lip Bar. Atlanta Daily World reports.
Private limited partners invested and granted the money. The LPs that supported the fund support this thesis. The companies that receive money are still private start-ups. The community has built their own rails because so little traditional VC funding is being allocated to these businesses. Everyone in this ecosystem is fine with this.
Despite this, a conservative group named the American Alliance for Equal Rights is suing it over its charitable grant program. AAER challenges the fund’s right of providing $20,000 in small-business grants to Black women. They claim the program violates Civil Rights Act of1866, which prohibits the use of race as a factor in contracts.
Edward Blum founded the AAER, an activist that helped to successfully overturn affirmative actions in universities. The AAER now conducts several other lawsuits of a similar nature (e.g. the AAER currently sues the Smithsonian Institute’s Latino Museum Studies Program because it hired Latino interns).
Fearless Fund is not having a good time in court. TechCrunch reported that earlier this month, an appeals court ruled in favor of Fearless. It upheld an injunction that prohibits the firm from giving grants to Black women entrepreneurs. At that time, the firm told TechCrunch it was weighing its options.
The Civil Rights Act of1866 was originally put in place to help those who were formerly enslaved, but now it is being used to harm the community that it was intended to help .
In the months following, the frustration in the community about this case has not diminished. Parsons experienced an emotional moment earlier on Monday at the ForbesBLK Summit held in Atlanta. She was joined on stage by Stacey Abrams, a political leader, and Dr. Sesha Moon, the chief diversity officer for Congress.
Parsons told Forbes that “anytime you’re surrounded by Black Women, they’re going to pour on you.” “So, I walked onto this stage and their eyes were watering. They understood the heavy burden we all carry in this country.”
Parsons confirmed to TechCrunch and The Atlanta Journal-Constitution that the lawsuit against Fearless had not been a factor in her decision. She did not give any other reasons for her departure. She remains an investor in this fund. “Ayana, as co-founder of the fund, is still an active investor. She has always been involved in multiple ventures that have centered on inclusion leadership, venture capital and entrepreneurship. Fearless Fund is just one of the avenues she uses to advocate for marginalized people, according to her spokesperson.
Parsons stated in a LinkedIn post that the firm was founded “to change the game for women entrepreneurs of color”. My reasoning was simple: women are the most established, but the least funded. They start businesses faster than any other demographic, but lack the resources, capital, education, and networks necessary to scale their business.”
She also pledged to not give up on her goals. She said, “I remain steadfast and committed to the advancement of women from color,” in an email statement. She also mentioned that she will soon publish a book.
As we have previously stated, big names in the technology ecosystem have not been very supportive. In an interview with Inc. in early 2014, CEO Simone said that the fund has lost nearly all of its partnerships except for two: JPMorgan and Costco. Even Mastercard, the sponsor of the now-contested Strivers grant, has never publicly commented on the lawsuit.
In fact, the support for anything DEI has shifted dramatically in 2024 from its peak in 2020, after the murder George Floyd. is more popular than ever to publicly criticize DEI and praise so-called meritocracy.
This article has been updated to include comments from Parsons’ public relations representative and her.