Arian Simone sat poised center stage at the Embrace Ambition Summit to share words that many entrepreneurs in the audience understood far too well.
“Women of color are the most founded, entrepreneurial demographic,” she said at the biannual business conference hosted by the Tory Burch Foundation. “They are just the least funded.”
Simone is the co-founder of Fearless Fund, one of the first funds launched by women of color that aim to only invest in women of color. At the event, her words rang true for the audience, many of whom are women entrepreneurs and know very well the daunting journey of fundraising that leaves them with only about 2% of all venture capital investment.
“I know that founders of color would have similar success rates if given the same opportunity and resources,” Jasmine Jones, founder of the intimates company Cherry Blossom, told TechCrunch. Jones was at the event and spoke on a panel earlier in the day regarding entrepreneurship.
“Until we all recognize that our distinct differences can be the greatest asset to the development of innovation, solutions, and growth, the industry will continue to overlook promising companies,” she said.
Regarding the harrowing stats, Simone said at the event it will take “trillions of dollars” to move them.
The current market downturn might drastically hinder any progress being made on this front. Valuations have plummeted, and total funding at all stages has declined. In May, Sequoia warned its founders that the financial recovery could be long, and Y Combinator told the companies in its portfolio that their chances of successfully fundraising were “extremely low” in this downturn.
However, the situation for diverse investors and founders ironically has a silver lining. While minority, women-led businesses need to be supported at this time, Simone said, these founders are used to weathering harsh economic conditions due to systemic barriers that have already excluded them from fundraising. There might be an increased dearth of capital this year, but access to the money wasn’t necessarily promised to these founders anyway.
As a result, Simone and her portfolio have a simple plan for navigating this time: Conduct business as usual.
The goal is to persist
Simone, a serial entrepreneur, launched Fearless Fund in 2019 alongside actress Keshia Knight Pulliam and business adviser Ayana Parsons. The fund seeks to close the funding gap for minority-women founders in the tech and consumer packaged goods space.
So far, the fund has seen success — it has invested in 31 companies, all founded by women of color. More than five of these were started by Black women who each raised $1 million in VC funding last year, a feat achieved by less than 250 Black women as of 2021.
For Fearless Fund, business as usual means continuing to deploy capital from its second fund into 10 to 15 new companies this year, Simone said. Typically, Fearless Fund provides companies with early-stage funding but recently decided to create an extended seed allocation to help support companies past Series A.
Simone said raising money past Series A is difficult for women of color. Last year, when there was a record $330 billion in venture capital invested in startups, less than five Black women raised money past the Series A stage, and one of them was Rihanna, per Crunchbase data.
Fearless Fund also plans to continue its focus on its internship and scholarship program in partnership with three HBCUs (historically Black colleges and universities) — Howard University, Clark Atlanta and Simone’s alma mater Florida A&M — to train the next generation of VCs. The fund will also continue its collaboration with the Tory Burch Foundation to deploy hundreds of grants for minority-women-owned enterprises. The goal remains to increase the economic opportunity and access for women and people of color.
“Companies that are venture-backed have seen their fair share of horror stories,” Simone said. “They don’t typically get rattled by the current macroeconomic climate.”
The work needs to be done
Simone is hopeful that increased awareness of the industry’s racial problems will help prevent any hurdles to increasing the capital allocated to diverse founders.
Simone said this is a unique moment in time, but overall, founders are grateful for the progress we’re seeing. In fact, some within her portfolio have apparently told her that her investments helped change the trajectory of their entrepreneurial careers — if they attempted to start a business even a decade ago, the extreme lack of support and resources would have conquered them.
Simone’s background enables her to understand this, which, perhaps, makes it imperative for her to stay steady during this downturn. Growing up in Detroit, she realized that investors didn’t look like her when she was raising money in college to open a boutique and promised herself that she’d one day become the investor she sought.
“When we first started the Fearless Fund, people looked at us like we were crazy,” she said, adding that there needs to be more Black and brown investors in the space to increase the amount of funding minority businesses receive. “We will only keep growing and encouraging more women to join us. That is when we will see a great change.”
This article was updated to reflect quotes by founder Jasmine Jones.
Correction: A previous version noted the Embrace Ambition Summit as the Embrace Action Summit. The article has been updated to reflect that change.
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