In a surprising twist, the Fearless Fund, a venture capital firm dedicated to supporting Black women entrepreneurs, faced a lawsuit in August 2023. CEO Arian Simone discovered that her firm’s grant program was being accused of discrimination by the conservative American Alliance for Equal Rights, led by Edward Blum.
The Legal Storm
On August 2, 2023, the lawsuit claimed that the Fearless Fund’s initiatives to help Black women-owned businesses were unfair. Around the same time, another legal battle unfolded when financial tech company Hello Alice was sued by America First Legal, founded by former Trump adviser Stephen Miller. Their lawsuit targeted a $25,000 grant program aimed at Black-owned businesses, labeling it as discriminatory too.
These legal challenges sparked one of the most significant affirmative action cases in recent years, threatening crucial funding that helps small entrepreneurs gain access to capital. The turmoil unexpectedly brought Simone and Elizabeth Gore, co-founder and president of Hello Alice, together.
A Unique Friendship
At the Fortune Most Powerful Women Summit in Laguna Niguel, California, Gore described how their shared experience created a deep bond, likening it to the foundation of a romantic comedy—except it was all too real.
As the two navigated the challenges, they provided mutual support while facing threats to their safety and the wellbeing of their families, companies, and employees. Hello Alice, which supports over 1.5 million small business owners, saw its fundraising efforts halted due to the lawsuit, resulting in layoffs for two-thirds of its staff. Gore also dealt with numerous cyberattacks, which she believes were linked to the lawsuit, and she even required sheriff protection at home due to safety concerns.
For Simone, the first few weeks following the lawsuit were so fraught with danger that she couldn’t stay in her home in Georgia.
Turning Adversity into Action
Fortunately, both lawsuits have since been resolved. Simone has launched a new $200 million fund that includes a loan program open to all business owners, regardless of race or gender. The lawsuit against Hello Alice was dismissed, allowing them to refocus on their mission.
Simone emphasized that even before these legal battles, securing funding for women of color was an uphill struggle. “Prior to the lawsuits, the work that we do is difficult. Right now, women of color receive only 0.39% of venture capital funds,” she pointed out, highlighting the systemic issues that existed long before the lawsuits.
Gore added that these discussions about funding should be happening among legislators in Congress, not through lawsuits that can stifle job creation and economic growth.
A New Chapter for Funding
With their legal troubles behind them, both CEOs are now dedicated to advancing funding opportunities for small businesses. They are determined to break down barriers and ensure that underrepresented entrepreneurs have access to the capital they need to thrive.
By turning their challenges into opportunities, Arian Simone and Elizabeth Gore are not just fighting for their own businesses; they’re championing a cause that could change the landscape for many aspiring entrepreneurs.