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A venture firm boss on Thursday described having to scale back her company's operations and grant programs after being pummeled by lawsuits from conservative groups.
Atlanta-based Fearless Fund CEO Arian Simone told Inc. in an interview that conservatives’ efforts to debilitate grant programs geared toward women of color are making inroads, causing her organization to fall apart.
Since the inception of the Fearless Strivers Grant Contest, Simone, with the aid of partner corporations, has been able to fund business owners $3.7 million in grants.
Simone told Inc. that ever since litigation against the Strivers grant program, several corporations have backed out with only two partners staying.
Arian Simone, one of the co-founders and CEOs of The Fearless Fund, speaks to media alongside attorney Benjamin Crump following a hearing on Jan. 31, 2024. (AP Photo/Rebecca Blackwell) (Associated Press)
"I didn't plan for this," Simone said.
"I'm definitely equipped for it, but I didn't prepare for the mental and emotional toll this has taken on me and my team."
Edward Blum, the conservative strategist behind the American Alliance for Equal Rights [AAFER] hit Simone's Fearless Fund Management, LLC with a lawsuit in August 2023. The lawsuit claimed that the firm’s Fearless Strivers Grant Contest was "racially discriminatory" and violated the Civil Rights Act of 1866 for making criteria solely for Black female entrepreneurs.
According to Inc., the firm started with a team of 19 when it launched in 2019. However, litigation caused it to scale down to six.
Simone told Inc. "It all fell apart due to litigation."
"You're talking millions of dollars we've lost, and it's truly impacting our operations," Simone said.
In June 2023, Fearless Fund touted a multi-million dollar investment into their grant program from major corporations like Bank of America, Costco, and Mastercard.
The companies invested in Fearless’ initiative to help "Women of Color" businesses receive Venture Capital funding, an effort that helps solve the issues "Women of Color businesses face while acquiring funding for their businesses."
"By receiving multi-million dollar follow-on investments from Bank of America, Costco, and Mastercard, Fearless Fund is doing the necessary work to advocate, financially support, and provide resources for Women of Color both in their portfolio and the emerging talent that is still to come," the Fund said in a statement from June of 2023.
AAFER filed the lawsuit two months after the Fund received the multi-million dollar investments, writing in a statement that AAFER members were "being excluded from participating in the program because they are the wrong race."
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Co-founders and CEOs of the Fearless Fund exit the James Lawrence King Federal Building following a hearing on Jan. 31, 2024, in Miami. (AP Photo/Rebecca Blackwell) (AP Photos)
"Under the terms of the grant program, official eligibility for the contest depends on an applicant’s race with only black females being eligible to participate in the process. The submission of an entry forms ‘a contract’ between Fearless Fund and the applicant," AEER said in a statement.
Simone on January 31st requested in a U.S. federal court of appeals to lift an injunction against its Fearless Strivers Grant Contest after they were blocked from awarding $10,000 to $20,000 and additional development services to startups led by Black-female-owned businesses.
Not only has the grant program struggled, but the litigation has taken a toll on the firm as well, losing eight figures of investments as a result.
A federal appeals court in Miami conducted a hearing in Miami on January 31st to decide whether her request for an injunction on the grant program would be lifted.
Simone said at a news conference after the hearing that the venture firm has not been able to raise money to continue its investments due to the litigation.
Atlanta-based Fearless Fund CEO Arian Simone told Inc. in an interview that conservatives’ efforts to debilitate grant programs geared toward women of color are making inroads, causing her organization to fall apart. (iStock)
"When people hear lawsuits, sometimes the spirit of fear has gotten to them. So yes, we have been financially impacted due to this lawsuit. We were looking for upwards about eight figures of investments that fell through this past fall," Simone said at a news conference following the hearing in January.
Another venture capital firm described needing to scale back operations and even lay off employees after a lawsuit targeting its grant program for black-owned small trucking companies.
Elizabeth Gore, the co-founder of Hello Alice, an online platform for business owners, discussed facing hardships due to America First Legal's litigation aimed at its grant program.
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Gore said that the company was forced to lay off 69 percent of its workforce.
"It still breaks my heart, actually," Gore told Inc.
She went on to say, "It happened right before the holidays in December, and we had to lay off people who have been with us for years."
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