There’s a new, troubling trend for entrepreneurs of color.
Investment firms and funding organizations are being struck with complaints, and in some cases, federal lawsuits, over the constitutionality of financially supporting BIPOC (Black, indigenous, and other people of color) entrepreneurs.
Most recently, the American Alliance for Equal Rights — a conservative activist organization that opposes affirmative action — initiated a lawsuit against the Fearless Fund, which awards $20,000 Strivers Grants to Black women entrepreneurs. The suit claims that the Fearless Fund violates the Civil Rights Act’s prohibition of racial discrimination in business contracts because other races aren’t being considered for venture funding.
This new impediment to securing financing opportunities for BIPOC entrepreneurs is disconcerting. It’s made even more complicated by the alarming statistic that of the $214 billion in venture capital funding allocated in 2022, a slim 1.1% went to companies with minority founders. Plus, entrepreneurs of color who seek debt financing are still likely to be offered inferior loans, even when they’re stronger applicants than their white peers, according to the Journal of Marketing Research.
Confronted with these challenges, angel investors and investment groups that fund BIPOC ent
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