Fearless Fund co-founder Ayana Parsons announced Monday that she was stepping down from her executive leadership role at the firm. Parsons will no longer serve as general partner and COO, but will instead “enjoy island life” with her family, she said in a LinkedIn post. Parsons co-founded the fund in 2019 with partner Ariane Simone, who will continue to serve as CEO.
Fearless Fund was founded with the mission of providing venture capital funding, grants, and financial education to startups founded by Black women, a demographic that is both underserved and highly promising: According to Crunchbase data, less than 1% of venture capital funding went to Black-founded startups in 2023, representing approximately $661 million of the $136 billion in funding.
In other words, Fearless Fund is doing exactly what venture capitalists are supposed to do: finding and investing in areas that are often overlooked in Silicon Valley (what they might call a “contrarian perspective”), according to a report in the Atlanta Daily World. To date, the fund has invested $26 million in over 40 companies, including Slutty Vegan, The Lip Bar, Partake Foods, and Live Tinted.
The money invested and granted comes from private limited partners. The LPs who backed the fund want to support this theory. The companies receiving the money are still privately held startups. With so little traditional VC funding available to these companies, the community is building its own rails. Everyone in this ecosystem agrees.
Still, the charity's grants program has drawn lawsuits from the politically conservative American Alliance for Equal Rights (AAER), which is challenging the fund's right to provide $20,000 small business grants to black women, arguing that the program violates the Civil Rights Act of 1866, which bans the use of race in contracts.
AAER was founded by Edward Blum, an activist who successfully fought to end affirmative action at universities, and is currently fighting several similar lawsuits (for example, the group is currently suing the Smithsonian Institution's Latino Museum Studies Program for hiring Latino interns).
The litigation hasn't gone particularly smoothly for Fearless Fund. As TechCrunch recently reported, an appeals court ruled against Fearless earlier this month, upholding a preliminary injunction that barred the company from giving grants to Black women-owned businesses. The company told TechCrunch at the time that it was still evaluating how to move forward.
When the story hit national news last year, many founders and investors spoke to TechCrunch about the infuriating irony of using the Civil Rights Act of 1866 to protest the company's programs — a law originally enacted to help former slaves that was now being used against the communities it was meant to help.
Months have passed since then, but the frustration in the community over the incident has not subsided. Early Monday morning, Parsons had an emotional moment onstage at the Forbes BLK Summit in Atlanta, where she was joined by political leader Stacey Abrams and Dr. Sesha Joy Moon, the council's chief diversity officer.
“When you're surrounded by black women, they're always there for you,” Parsons said, according to Forbes. “So when I walked up on this stage, their eyes were watering because they understand the burden that's placed on all of us in this country.”
After announcing her resignation, Parsons confirmed to the Atlanta Journal-Constitution, and a spokesperson confirmed to TechCrunch, that the lawsuit against Fearless was not the motivating factor for her departure. However, she did not offer any other explanation for her decision to step down. She is also an investor in the fund. “As a co-founder, Ayana remains an investor and has always worked on multiple ventures centered around inclusion leadership and development, venture capital and entrepreneurship. The Fearless Fund is simply one vehicle in her efforts to be an advocate for marginalized people,” the spokesperson said.
In a LinkedIn post, Parsons said she founded the company “to change the game for women entrepreneurs of color. The reason is simple: Women of color are the most prolific but most underfunded entrepreneurs. They are starting companies at a faster rate than any other demographic, but lack access to the capital, resources, education, and networks they need to scale their businesses.”
She also promised not to give up on her goals: “I remain steadfast in my support and commitment to empowering women of color,” she said in an emailed statement, adding that she also has a book coming out soon.
Still, as we've noted before, the tech giants have unfortunately not been forthcoming in their support: CEO Simone told Inc. earlier this year that the fund had lost nearly all of its partners except for two: JPMorgan and Costco. Even Mastercard, the sponsor of the currently contested Strivers Grant, has never publicly commented on the case.
In fact, support for anything perceived as DEI in the tech industry peaked in 2020 after the murder of George Floyd before making a complete about-face in 2024. It is now fashionable to openly denounce DEI and praise so-called “meritocracy.”
This story has been updated to add statements from Parsons and her publicist.