Their businesses were transformed by a grant program for black women. His future is now in jeopardy.

Originally published by The 19th

Bettina Benson was getting off a red-eye flight from Los Angeles, heading home to Marietta, Georgia, when she received an email that changed the course of her company. She received a grant in 2023 from venture capital firm Fearless Fund, created to help Black women small business owners access capital.

Benson, a self-taught designer, started the online clothing brand Chloé Kristyn in 2016. For her, receiving the grant was about aligning the fund’s goals with her own mission: Fearless Fund understood the challenges Black women entrepreneurs face, she said.

“Running a business is inherently challenging, and as a woman of color, especially being self-funded and with the gaps in funding, the challenges can be even more intense,” she said.

Black women entrepreneurs have more difficulty accessing traditional forms of bank financing as well as grants and venture capital financing, according to a study conducted by Crunchbase, a company that provides business statistics.

White men receive a disproportionate share of venture capital funding compared to female entrepreneurs. The funding gap between white men and black women entrepreneurs is even wider, with black women receiving less than 1 percent of venture capital funding, the report found.

Founded in 2018 by Arian Simone and Ayana Parsons, Fearless Fund has raised more than $25 million to invest in Black women-owned businesses. The small venture capital firm has also awarded more than 350 grants through a number of different programs, including the Strivers program, which awards $20,000. Those grants have gone to Black women entrepreneurs to help close racial inequality and give them the same opportunities for economic advancement, Simone said.

But now the Fearless Fund’s ability to provide grants exclusively to Black women is in jeopardy.

Edward Blum, a conservative activist who led the fight to end race-based affirmative action at colleges and universities, has sued Fearless Fund in federal court. Blum and his organization, the American Alliance for Equal Rights, claim that the fund’s Fearless Strivers Grant match discriminates against other races and violates the Civil Rights Act of 1866, a law passed during Reconstruction to protect black people. support, especially those who were previously enslaved. .

In the coming months, a group of judges on the U.S. Court of Appeals for the 11th Circuit in Florida will determine whether to bar Fearless Fund from awarding the $20,000 grants to Black women-owned businesses while the case plays its way through makes its way through the legal system. .

The lawsuit is part of a larger conversation that is worrying civil rights activists across the country. They fear that if the Fearless Fund’s grant match is rejected, it could also threaten other organizations focused on helping historically underserved groups. The American Alliance for Equal Rights’ lawsuits are just part of right-wing groups’ efforts to block diversity, equity and inclusion programs. America First Legal, an organization founded by Stephen Miller, who advised former President Donald Trump, has sued fintech company Hello Alice over its subsidy of black-owned small trucking companies.

Benson and other women who have benefited from grants from the Fearless Fund say the program has been life-changing.

Before receiving the grant, Benson had problems financing inventory for wholesale orders, marketing and attracting the right talent. She was in the middle of fulfilling some “pretty important wholesale orders” when the money arrived, providing a much-needed cushion.

“You fill those orders and then you get paid, but you have to have money to invest in production and your materials,” Benson said.

The fund has grown her business, she said; she has even launched a new clothing line.

Janell Norris, CEO and founder of Selfie Skin Co., a skin-care brand aimed at Black women, had tried to get a grant from the Fearless Fund a few times before getting one in July. She was recording a video at her friend’s house for a new grant application when she heard she was in the final round of the selection process.

Her friend still had the camera rolling when Norris received the news and cried tears of joy.

Norris received a $10,000 Fearless Fund grant, through a different program than the Strivers program that Blum focused on. The money not only impacted her business, it also created opportunities for those around her, she said. This allowed her to expand her products from two to six and get help with both project management and marketing.

“I don’t think people realize that when one brand gets a grant, it’s not just that one brand, but you’re actually supporting an ecosystem of other minority-owned businesses,” she said.

Norris credits Fearless Fund for helping her brand gain visibility through the venture capital firm’s website, and for allowing her to invest in organizations that serve underprivileged people and its employees.

But not long after she received the grant, she says uncertainty arose. A friend pointed out Blum’s lawsuit after she posted about the grant on social media. She is concerned about the entrepreneurs who will apply for subsidies in the coming years.

“For me it was okay, I got rejected, but you know what, I’m just going to try again next year, and I’m going to work on it all year until it comes back again,” Norris said. “For the entrepreneur who got that rejection in 2023, there is nothing to look forward to in 2024 because someone decided to attack programs that benefit women of color.”

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