Eleventh Circuit Blocks Venture Capital Fund’s Grant Contest for Black Women-Owned Businesses
Fearless Fund , which seeks to invest “in women of color-led businesses” and “bridge the gap in venture capital funding for women of color,” offered a contest to provide four businesses with $20,000 in funding and mentorship support. According to the Eleventh Circuit decision, the contest was only open to “‘black females who are … legal U.S. residents’” or businesses that are at least 51 percent Black women-owned. Further, applicants had to agree to allow Fearless Fund to use their names, images, likenesses, and business ideas for promotional purposes and agree to arbitration, among other matters. The American Alliance for Equal Rights (Alliance) filed a lawsuit alleging that it is a contract covered by Section 1981 and that the contest, by its terms, violates Section 1981 because it excludes non-Black applicants based on their race. The case reached the Eleventh Circuit after a federal district court ruled that the Alliance had standing to bring suit but declined to ...