Strategy Session: Fearless Fund Securing $20M To Back Women Of Color Entrepreneurs

Strategy Session is a feature for Crunchbase News where we ask venture capital firms five questions about their investment strategies.

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Although Fearless Fund has only been around since 2019, it is well on its way to raising $20 million in support of entrepreneurs that are women of color (WOC).

Entrepreneur and philanthropist Arian Simone co-founded the fund with actress Keshia Knight Pulliam and business executive Ayana Parsons, to address the disparity that exists in venture capital funding for women of color. VC funding to women not only dropped 27 percent between 2020 and 2019, but less than 1 percent of WOC-owned businesses receive funding, even though minority women account for 89 percent of new women-owned businesses.

The Atlanta-based fund, which Simone expects to invest in approximately 30 startups, invests in pre-seed, seed and Series A companies focused on technology across the consumer packaged goods, fashion and beauty industries. It has invested in six companies so far, including:

• EnrichHER, an Atlanta-based fintech platform for women entrepreneurs;
• 100 Black Angels Fund, a fellow investor in minority-founded startups; and 
• Hairbrella, an Atlanta-based “rain-chic” fashion brand.

We spoke to Simone about fundraising, Fearless Fund’s mission and its future. What follows has been lightly edited for length and clarity.

What was the fund-raising experience like?

Simone: At first, we concentrated on friends and family to share in our mission and vision. It has been an interesting journey. It was difficult at first because what we are doing hasn’t been done yet. We are one of the first WOC funds, but we don’t plan on being the last. People had questions, such as if the market was large enough, which it is — a lot of women of color start their own businesses, but are the least funded.

Over time, it got easier to raise funding, and organizations like Invest Atlanta and Fifth Third Bank started looking at us. They began to see that we were onto something, and we went about getting institutional investors. We started a $5 million concept fund in 2020, but here came PayPal and pushed that through the roof. We went from $5 million to $20 million with an option to oversubscribe.

At the same time, there was a global pandemic and everyone was sitting still, so it made meetings go quicker. I couldn’t travel to Silicon Valley or New York, so I took lots of Zoom meetings, which worked in our favor. Then the social justices happened through Black Lives Matter and police brutality. We knew we had to take action and take a role in minority equity, and that all worked in our favor. Normally, it would take an emerging fund longer just to raise this amount of money, but after Black Lives Matter, there was a domino effect, and the stars started to align.

How do you like to work with founders?

Simone: I am passionate about this. We work with founders at an attentive level. We are previous entrepreneurs and operators turned venture capitalists. We are involved, but not in a pushy way. We are hands-on, but not invasive. We provide support and pair entrepreneurs with different corporations so there is a 360-degree relationship. Founders love having the C-suite expertise, while there is a potential exit on the corporate end. We also provide mentorship, celebrities and influencers who help with the marketing and corporate approach. We are more a strategic partner, more than just the capital.

How do you see Fearless Fund turning the tide on systemic racism impacting Black women entrepreneurs?

Simone: We are making a mark, but we need to make a dent. We need billions of dollars to make a dent. We are just doing our part in the area of systemic racism, and we need other people to join on the journey.

What needs to be in place to inspire more women of color to start their own companies?

Simone: I don’t think they need to be inspired. Women of color are founding businesses more than ever. What needs to be inspired is investors like us because the industry is still 80 percent while males. It is not just a lack of investment, but a lack of investors who are diverse. This is what is going to change the other number — more diversity of people investing will change it. We need more women of color cutting checks.

Where do you see Fearless Fund headed?

Simone: At this stage, our next steps are to identify the next winning portfolio companies and foster and support their needs. This is fund one, but we plan on a fund two and three and then have larger funds afterward. Our goal is make sure we raise quickly, fund quickly and return quickly. We are going to nurture founders and create the biggest success stories.

Illustration: Dom Guzman