Protecting Equity Investments In Minority Businesses From Activist Organizations


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.

Key Takeaway

Protecting equity investments in minority businesses from activist organizations is crucial to ensure fair access to funding for BIPOC entrepreneurs.

Investing in Crowdfunding Campaigns

Investing in crowdfunding campaigns that support BIPOC entrepreneurs can provide a democratic and color-blind platform for underrepresented entrepreneurs to connect with potential funders. This can create opportunities for entrepreneurs of color to secure vital early-stage capital.

Opening Networks to Include Striving BIPOC Entrepreneurs

Engaging with minority business ecosystems and providing mentorship and guidance to BIPOC entrepreneurs can expedite their learning curve and catalyze private sector investment capital. This involvement can lead to significant wins for BIPOC entrepreneurs, such as securing funding and forming strategic partnerships.

Establishing Intentionally Inclusive Investment Criteria

Establishing intentionally inclusive investment criteria related to BIPOC-owned startups, such as considering founders who attended historically Black colleges or universities or grew up in low- or moderate-income communities, can provide patient and flexible capital to Black entrepreneurs. This transparent effort aims to support BIPOC entrepreneurs and insulate against discriminatory treatment claims.

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