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(Reuters) – The founders of a venture capital fund devoted to funding Black women-owned businesses on Thursday defended their efforts to support underrepresented entrepreneurs in the face of a lawsuit by a conservative activist accusing it racial discrimination.
The Fearless Fund’s leaders and its lawyers during a news conference in New York pledged to fight a lawsuit filed last week by a prominent affirmative action opponent who spearheaded the successful U.S. Supreme Court challenge to the consideration of race in college admissions.
The lawsuit was by the American Alliance for Equal Rights, a group founded by activist Edward Blum, who through another organization pursued the cases against Harvard University and University of North Carolina that led the Supreme Court in June to end affirmative action in higher education.
“We are not scared,” Arian Simone, the chief executive and co-founder of the Atlanta-based Fearless Fund, told reporters. “We are fearless.”
The news conference was part of the fund’s first public response to the lawsuit, which alleged it unlawfully allowed only Black women small business owners to be eligible for a competition that awards $20,000 in grants and other resources.
Women of color business founders received only 0.39% of the $288 billion that venture capital firms deployed in 2022, according to the Fearless Fund.
Blum, who is white, and his group alleged that some of its white and Asian American members had been excluded from the grant program. He did not respond to a request for comment.
Alphonso David, one of the Fearless Fund’s lawyers, criticized the lawsuit’s “cynical” claim that the fund violated Section 1981 of the Civil Rights Act of 1866. The law, barring racial bias in private contracts, was adopted after slavery was abolished in the U.S. Civil War’s aftermath.
“This a frivolous attempt to prevent progress from winning,” said Ben Crump, a prominent civil rights lawyer and member of the defense team, which is led by the law firm Gibson Dunn & Crutcher.
