The Lawyers’ Committee for Civil Rights Under Law recently announced that they have filed a brief to help venture capital fund, Hello Alice, amidst attacks from conservative groups.
Filed in conjunction with the Southern Poverty Law Center and law firm Crowell Moring LLP, the groups will be writing the argument to be presented to the court in support of Hello Alice and their grant program dedicated to helping fund Black-owned businesses.
The Hispanic National Bar Association and the Asian Americans Advancing Justice have also contributed to the brief.
Per the Press Democrat, in their argument, the nonprofits argue that Section 1981 of the Civil Rights Act of 1866-which prevents discrimination in contracts-is being misused by conservative group America First Legal, as they go against capital firms such as Hello Alice, that are supporting Black entrepreneurs and helping address inequities.
“This litigation is nothing more than an attack on the efforts to undo our country’s legacy of extreme economic inequality along racial lines, and it is as dangerous to Black entrepreneurs as it is antithetical to the goals of racial justice embedded in the Civil Rights Act of 1866,” said Senior Staff Attorney of the Southern Poverty Law Center, Leslie Faith Jones, per a press release. “We will not simply watch as agents for change are discouraged from building a more equitable society – we will continue working to achieve the promise of civil rights for all.”
Currently, there’s substantial racial inequities when it comes to owning a business in the U.S. Per a report by Brookings, although the rate of Black-owned businesses did mark an increase particularly amongst Black women-owned businesses, it would take 256 years to reach equality in entrepreneurship with the current annual growth.
Overall, Black entrepreneurs record difficulties with obtaining funding, even from venture capital investors. According to the latest report by CrunchBase, overall funding for venture capitals fell from $337 billion to around $214 billion in 2022 because of issues such as inflation.
Out of all businesses, Black owned startups were affected the most by this drop in funding as their share decreased from 1.5% in 2021 to 1.1% in 2022. In the past years, Black owned businesses have received a little more than one percent of venture capital funds.
The recent attacks by conservative groups on venture capital firms such as Fearless Fund and Hello Alice pose more of a danger of widening the disparity gap. Recent lawsuits have been aimed to take down initiatives created to secure VC funding for Black-owned businesses.
“At a time when systemic racism continues to pervade the venture capital industry, Stephen Miller’s latest legal crusade is a transparent ploy to fundraise at the expense of Black entrepreneurs simply trying to grow their small businesses,” said the Director for the Economic Justice Project with the Lawyers’ Committee, Katy Youker, per a release. “We refuse to sit back and let them stifle meaningful efforts to change the status quo by advancing equity and empowering underrepresented voices.”
