US Judge Denies Request to Block Venture Capital Fund’s Grants for Black Women, Reports Reuters

A federal judge in Atlanta recently dismissed an attempt to prevent a small venture capital fund from distributing grants specifically to businesses owned by Black women. This legal action was initiated by Edward Blum, an activist known for his successful challenges to race-conscious policies in higher education.

During a hearing, U.S. District Judge Thomas Thrash denied Blum’s request for a preliminary injunction to stop the Fearless Fund from evaluating grant applications exclusively from Black women-led businesses. Blum’s organization sought an emergency appeal to have the 11th U.S. Circuit Court of Appeals intervene, citing looming deadlines for grant applications.

The judge’s decision appeared to rest on the argument that the Fearless Fund’s grant program constituted protected speech under the First Amendment, a conclusion that Blum’s group argued could undermine nondiscrimination laws.

Founders Arian Simone and Ayana Parsons expressed satisfaction with the ruling, reinforcing their commitment to addressing systemic racial disparities within the venture capital sector. They highlighted their goal of empowering women of color entrepreneurs and acknowledged that while challenges remain, they are determined to make a difference.

This lawsuit is among several filed by Blum’s group since August, all targeting initiatives aimed at providing greater professional opportunities for Black, Hispanic, and other underrepresented minority groups.

Blum, who has a history of involvement in similar legal disputes, previously led efforts that resulted in the Supreme Court’s ruling against affirmative action policies in college admissions used by prominent universities.

The Fearless Fund highlights that Black women-owned businesses accounted for less than 1% of the $288 billion in venture capital deployed in 2022. Since its establishment in 2019, the fund aims to rectify this imbalance and has invested nearly $27 million in businesses run by minority women. Its efforts include the Fearless Strivers Grant Contest, which offers $20,000 grants and other resources to support Black women entrepreneurs.

The lawsuit argues that the fund’s criteria for grant eligibility unlawfully excludes applicants of other races, in violation of Section 1981 of the Civil Rights Act of 1866, which was designed to ensure equal rights to contract and engage in business for all citizens, particularly those who were formerly enslaved.

The law has been interpreted over the years to also protect against racial discrimination affecting white individuals.