(Bloomberg) -- Fearless Fund, an Atlanta-based venture capital firm focused on financing women of color, announced it will close a program for Black female entrepreneurs after settling with anti-affirmative action activist Edward Blum.
At first glance, it reads like a clear cut win for Blum — after over a year of litigation, Fearless Fund got rid of the $20,000 grant initiative for Black women that the conservative legal activist argued was discriminatory and should be open to everyone.
But in settling the case, Fearless Fund is depriving anti-DEI opponents from the legal battle they’re seeking. After all, you can’t get the Supreme Court to reinterpret existing employment law if no one is willing to fight you in court.
“With the dismissal of this case, the immediate threat that this lawsuit posed to DEI, workplace diversity, and free speech has been subdued for now,” said civil rights activist Al Sharpton, who advised the fund’s founder, Arian Simone.
Blum has had such a successful track record at the Supreme Court — he was behind the racial discrimination case against Harvard University that ultimately led the Supreme Court to ban the consideration of race in college admissions — that organizations on the receiving end of his lawsuits are largely choosing to abandon or alter their programs rather than litigate their legality.
Aside from Fearless Fund, there’s also the Smithsonian Institution, which opened an internship program at Museum of the American Latino up to non-Latinos; two Texas nonprofits similarly opened their small business grants, previously available to women and minorities, up to everyone; and several law firms are no longer offering mentorship programs to women and other marginalized groups.
No one, it seems, is willing to serve as the test case to find out if Blum can do to employment law what he achieved with college admissions.
The other consequence of Fearless Fund’s decision to no longer offer the grant is that in a world where an almost negligible amount of venture capital funding has gone to Black founders, there’s one less program addressing that disparity.
Many of the programs targeted by Blum were designed in an effort to remedy some sort of long standing inequality, whether it was the lack of female and minority law partners or the fact that only 5% of museum curators identify as Latino. A minuscule amount of venture capital funding goes to Black entrepreneurs (just 0.32% this year, according to data compiled by Crunchbase) and Fearless Fund’s founders were unabashed in their desire to change that.
Fearless Fund still exists, however. The same day that the organization announced the elimination of its grant it also unveiled a new, $200 million debt fund for entrepreneurs. This time, the fund is open to “under-resourced founders,” a term that may prevent it from getting sued.
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