In November 2023, I had the awesome opportunity and privilege to speak at the Black Women in Asset Management (BWAM) Conference. As I said in a reflection piece I wrote soon after, it was a meaningful experience for many reasons.
One of which was simply bearing witness to how far we’ve come. Here’s some of what I said:
“When I started my career at Bankers Trust (now Deutsche Bank) in 1986 or when I started my business in 1995, you might have had a conference room full of Black women who worked in the industry.
But a full blown conference, with multiple hundreds in the room – representing the myriad disciplines of the industry: investment management, private equity, wealth management, legal, venture capital, impact investing, and pensions funds?”
Between the mainstage and the breakout room discussions, the conference was certainly a reflection of the progress made in the industry in terms of representation. So, yay!
But, several panels didn’t shy away from addressing a backlash to this progress that was afoot.
Most notably in the form of the lawsuit that was brought, in August 2023, against the Fearless Fund, a Black-owned venture capital firm.
The Fearless Fund (FF) was established in 2019 to, “invest in women of color led businesses seeking pre-seed, seed, or Series A financing.” And, there’s a strong likelihood that you use (or have used) a product or service created by one of the founders they’ve financed.
The suit was brought by the same conservative activist attorney who claimed considering race in college admissions was unconstitutional. This same claim was being made regarding the foundation arm of the FF and its “Fearless Strivers Grant” contest. A grant program, which offered $20,000, and was only “[open] to Black females.”
Given the U.S. Supreme Court’s June 2023 ruling that ended the ability of colleges and universities to consider race in college admissions, the court’s pending ruling on this lawsuit was fresh on the minds of many people at the conference.
Well, earlier this week, that uncertainty and concern were validated. The 11th Circuit temporarily blocked the FF’s ability to continue this program.
This ruling is yet another example of how things that were intended to benefit Black people, in general, and Black women, in particular, are now thought to be exclusionary and discriminatory toward others.
As a Black woman and as an entrepreneur, I am appalled by this ruling. It really left me feeling dispirited and disgusted. And if you saw the video I posted on social media last Tuesday, my frustration was clearly evident.
I’ve grown weary of hearing, “pull yourself up by your bootstraps.” Particularly when this ruling is an example of taking away the boot and the straps!
Like, the unmitigated gall of the attorney who brought the suit to say, “programs that exclude certain individuals because of their race such as the ones the Fearless Fund has designed and implemented are unjust and polarizing.”
How can you make such an assertion given the hundreds of years of discrimination and disenfranchisement Black people and Black women have suffered?
The Stats Say Differently
As you can tell, I’m still a little pissed.
And yes, I am being indignant when I ask (into the void), “Are you kidding me?!”
But, actually, the stats rightfully beg that we all ask this question:
According to the Brookings Institution, “Between 2017 and 2020, the number of Black women-owned businesses increased by nearly 20%, far exceeding the growth of women-owned businesses and Black-owned businesses overall.
GoDaddy’s research concludes that while Black women make up less than 10% of the U.S. population, they’ve emerged as the fastest-growing group of entrepreneurs.
Wells Fargo released what they describe as a “backgrounder,” which found that “Black/African American women’s small businesses grew to 2.1 million between 2019 and 2023, generating $98.3 billion in revenue for the U.S. economy.”
As an aggregate, $98.3 billion is quite an impressive number. But the average revenues for these businesses is quite sobering. They “increased 32.7% to $47,300 between 2019 and 2023.”
No where in the ballpark when compared to businesses founded by Latinx or White women. Or, Black or White men.
According to Business Insider, “Before 2021, only 93 Black female founders had raised $1 million or more in venture capital, and prior to 2018 just 34 had done so.” These facts come from the most recent findings by ProjectDiane, a biennial report on the state of Black and Latinx women founders by the organization DigitalUndivided.
And, according to the Fearless Fund, women of color business founders in 2022 received only 0.39% of the $288 billion that venture capital firms deployed. (Bold emphasis mine.)
That’s a disproportionately small share of venture capital investments, wouldn’t you say?
Setting Precedent; Moving Forward
As the stats confirm, this lawsuit and ruling aren’t about the unintended consequences from legislation that was put in place to protect Blacks. Or the initiatives like the “Strivers Grant Fund” to support Black women in business.
The intent of the Fearless Fund was to help level the playing field, not to create unfair advantages.
And yes, they can continue raising pre-seed, seed, and Series A capital. But, for the time being, they cannot offer grants that would offer smaller start-ups a leg up.
The unfortunate truth is that this is a direct backlash against diversity and affirmative action initiatives.
If the current ruling stays, the implications are far reaching:
- The entrepreneurial ecosystem, innovation, and economic growth are at risk – creating the possibility for a less dynamic economy.
- Systemic inequalities against marginalized people will continue to get reinforced.
- The Black wealth gap only grows wider than it is currently. (According to the Survey for Consumer Finances, median Black wealth increased from $27,970 to $44,890, but continued to lag other racial groups. In 2022, median wealth was approximately $62,000 for non-white Latino or Hispanic households; $285,000 for white households; and $536,000 for Asian American households.”
But, as history has demonstrated, we have weathered much greater obstacles to our individual and collective growth.
So while this is a setback and a bit de-motivating, right now, I also believe it will ultimately serve as motivating and mobilizing fuel for a wide range of stakeholders.
Particularly if we keep top of mind that in reality this ruling doesn’t just affect Black women.
It affects all of us!
