On Thursday, the head of a venture firm described having to scale back her company’s operations and grant programs after being hit by lawsuits from conservative groups.

Arian Simone, CEO of the Atlanta-based Fearless Fund, told Inc. in an interview that conservative efforts to weaken grant programs targeting women of color are making progress, causing his organization to retreat. crumble

Since the inception of the Fearless Strivers grant contest, Simone, with the help of partner corporations, has been able to fund business owners $3.7 million in grants.

Simone told Inc. that since the litigation against the Strivers grant program, several corporations have pulled out and only two partners have remained.

ariana simon

Arian Simone, one of the co-founders and CEOs of The Fearless Fund, speaks to the media alongside attorney Benjamin Crump after a hearing on Jan. 31, 2024. (AP Photo/Rebecca Blackwell) (Associated Press)

“I didn’t plan this,” Simone said.

“I’m definitely prepared for it, but I didn’t prepare for the mental and emotional toll this has taken on me and my team.”

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Edward Blum, the conservative strategist behind the American Alliance for Equal Rights (AAFER), filed a lawsuit against Simone’s Fearless Fund Management, LLC in August 2023. The lawsuit claimed that the company’s Fearless Strivers grant contest was “racially discriminatory” and violated the Civil Rights Act of 1866 by establishing criteria only for black businesswomen.

According to Inc., the company started with a team of 19 when it launched in 2019. However, litigation caused it to be reduced to six.

Simone told Inc. “Everything fell apart because of litigation.”

“We’re talking about millions of dollars that we’ve lost, and that’s really impacting our operations,” Simone said.

In June 2023, Fearless Fund touted a multimillion-dollar investment in its grant program from large corporations such as Bank of America, Costco, and Mastercard.

The companies invested in the Fearless initiative to help “women of color” businesses receive venture capital funding, an effort that helps solve the problems that “women of color businesses face when acquiring funding for their businesses.” .

“By receiving multimillion-dollar follow-on investments from Bank of America, Costco, and Mastercard, Fearless Fund is doing the work necessary to advocate, financially support, and provide resources to women of color both in its pipeline and emerging talent to come,” the Fund said in a June 2023 statement.

AAFER filed the lawsuit two months after the Fund received the multimillion-dollar investments, writing in a statement that AAFER members were “being excluded from participating in the program because they are of the wrong race.”

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Fearless Fund co-founders and CEOs leave the James Lawrence King Federal Building following a hearing on Jan. 31, 2024, in Miami. (AP Photo/Rebecca Blackwell) (AP Photos)

“Under the terms of the grant program, official eligibility for the contest is dependent on the race of the applicant and only Black women are eligible to participate in the process. Submission of an entry forms ‘a contract’ between Fearless Fund and the applicant “AEER said in a statement.

Simone on January 31 required in a US federal appeals court to lift an injunction against its Fearless Strivers grant competition after they were blocked from awarding $10,000 to $20,000 and additional development services to startups led by Black women-owned businesses .

Not only has the subsidy program had problems, but the litigation has also taken its toll on the company, losing eight figures of investments as a result.

A federal appeals court in Miami held a hearing in Miami on Jan. 31 to decide whether its request for an injunction on the grant program would be lifted.

Simone said at a news conference after the hearing that the venture firm has been unable to raise money to continue its investments because of the litigation.

woman sitting in classroom with laptop next to words "diversity equity inclusion"

Arian Simone, CEO of the Atlanta-based Fearless Fund, told Inc. in an interview that conservative efforts to weaken grant programs targeting women of color are making progress, causing his organization to retreat. crumble (iStock)

“When people hear lawsuits, sometimes the spirit of fear takes over. So yes, we have been impacted financially because of this lawsuit. We were looking at around eight figures of investments that failed last fall,” Simone said in a press conference after the hearing in January.

Another venture capital firm described the need to reduce its operations and even lay off employees after a lawsuit against its grant program for black-owned small transportation businesses.

Elizabeth Gore, co-founder of Hello Alice, an online platform for business owners, spoke about the difficulties she faces due to America First Legal’s litigation targeting her grant program.

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Gore said the company was forced to lay off 69 percent of its workforce.

“Actually, it still breaks my heart,” Gore told Inc.

He went on to say, “It happened right before the December holidays and we had to let go of people who have been with us for years.”

By Sam