Fearless Fund ends program for Black women, settling discrimination lawsuit

September 12, 2024

Arian Simone (L) presents the Fearless Strivers New Orleans Grant onstage during the 2022 Essence Festival of Culture at the Ernest N. Morial Convention Center on July 1, 2022 in New Orleans. (Paras Griffin/Getty Images)

(NEW YORK) — Fearless Fund, a venture capitalist firm that invests in female entrepreneurs of color, has settled a discrimination lawsuit over a grant program specifically for Black women.

The lawsuit from the American Alliance for Equal Rights (AAER) claimed that the fund’s Fearless Strivers Grant Contest, which was open “only to Black females,” was discriminatory.

The grant program was at its end when the court case began in 2023, according to an online post by Fearless Fund founder Arian Simone, and the fund said it was motivated to avoid a court ruling so as not to lead to a Supreme Court decision that could end minority-based funding nationwide.

The Fearless Fund said it will continue to focus on “helping under-resourced entrepreneurs who have been ill served by traditional capital markets for far too long.” In a statement on the settlement, it announced a new $200 million debt fund with the goal of lending to more than 3,000 under-resourced founders.

Representatives of Fearless Fund partners Simone and Ayana Parson told reporters in August 2023 that the fund was established to address the wide gap in venture capital funding for businesses led by women of color “who confront barrier after barrier to obtain support and investments for their businesses.”

The Fearless Strivers Grant Contest was created specifically for Black women because Black women-owned businesses receive less than 1% of venture capital funding, according to the organization.

AAER called the grant program “divisive and illegal” and claimed that it “encouraged the Fearless Fund to open its grant contest to Hispanic, Asian, Native American and white women but Fearless has decided instead to end it entirely.”

White women-founded companies take home 64% of “Diversity Investments” by deal count, meanwhile women of color-owned businesses only take home 10%, according to an analysis of Crunchbase data by venture capital firm BBG Ventures.

Fearless Fund partners have long defended their work, citing the poor representation of women of color among venture capital recipients and evidence of racial bias in the investment decisions of asset allocators.

“From the moment the lawsuit was filed, I pledged to stand firm in helping and empowering women of color entrepreneurs in need. I stand by that pledge today and in fact my commitment remains stronger than ever,” read a statement from the organization’s co-founder Arian Simone. “Our overarching mission remains focused on helping and empowering entrepreneurs who have been historically overlooked in the venture capital marketplace.”

AAER’s founder Edward Blum also leads the Students for Fair Admissions, the group that initiated the anti-affirmative action case that reached the Supreme Court and won the case, setting new limits on the use of race-based policies in college admissions.

The conservative group claimed that affirmative action, which was implemented to address racial inequities in access to higher education, violated the equal protection clause of the 14th Amendment.

Slowing but steady job market expected in September jobs report

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(NEW YORK) — Concerns about inflation have increasingly turned to concerns about the job market. Last month’s weaker than expected jobs report led to turmoil in stocks.

Expectations are that Friday’s report will show 161,000 jobs added when it’s released at 8:30 a.m.

If jobs come in around expectations it would mean a slowing but steady job market. Some economists are expecting less, around 150,000, pointing out that August data can often come in worse than expected and can be revised later.

Still, a significantly worse-than-expected report could once again lead to concerns that the Fed’s rapid raising of interest rates has hurt the economy and job market more than previously known.

The Fed is on track to cut interest rates at its next meeting announcement on Sept. 18.

Fed Chair Jerome Powell last month said “the time has come” to lower interest rates.

Powell indicated the Fed would soon bring interest rates down from a 23-year high. The shift could lower borrowing costs for everything from credit cards to auto loans to mortgages.

While the unemployment rate remains historically low, it ticked up to 3.8% last month. A sharp downward revision of job growth estimates in June and July lowered those totals by a combined 110,000 jobs.

Instagram introduces mandatory ‘Teen Accounts’ with built-in limits, parental controls

Meta

(NEW YORK) — For the first time in its history, Instagram on Tuesday announced the launch of accounts designed specifically for teenage users with built-in privacy protections.

The new accounts, called “Teen Accounts,” will be automatic for all Instagram users under the age of 18, both for teens already using the app and for those signing up.

By default, Instagram users younger than 16 will need a parent’s permission to change their account settings.

The changes — expected to impact tens of millions of users — were announced by Instagram head Adam Mosseri in a live interview on ABC News’ Good Morning America.

“They’re an automatic set of protections for teens that try to proactively address the top concerns that we’ve heard from parents about teens online,” Mosseri said on GMA. “Things like who can contact them, what content they see and how much time they spend on their device … all without requiring any involvement from the parent.”

Mosseri said the rollout of Teen Accounts starts Tuesday with new users signing up for the app, while existing teen users will see their accounts switch to the new Teen Accounts model within 60 days.

Among the changes put in place by Instagram include a new privacy setting that, by default, places all teen users in private accounts. In order to switch to a public account, teens under age 16 will need a parent’s permission.

Under the private account setting, teens will need to accept new followers and only people whom they accept as followers can see their content and interact with them.

In addition, teen users will now automatically only be able to message with people they follow, or are already connected to, and parents will have a new tool in their settings that allows them to see with whom their teen has recently been messaging.

With the new accounts, teens will have the power to choose the age-appropriate topics they want to see more of on Instagram, like sports or art, and parents will also be able to see the topics their teens choose.

In order to limit the amount of time spent on Instagram, all Teen Accounts will be placed in “sleep mode” between 10 p.m. and 7 a.m., while parents can also adjust their child’s time settings — including limiting access completely overnight — in the parental supervision tool.

Another change for Teen Accounts is that they will automatically be placed in more restrictive content settings, which will limit the content they see in search functions like Reels or Explore from accounts they don’t follow, according to Instagram.

Antigone Davis, vice president and global head of safety for Meta, the parent company of Instagram, told GMA the company is also implementing new ways to verify users’ ages.

“We are building technology to try to identify if you’ve lied about your age and then move you into those stricter settings,” Davis said. “This is a challenging area for industry, which is why, on top of building that technology that will try to identify age liars and put them into those protective settings, we also will have moments where, if we get a strong signal, we will ask you to age verify.”

Davis said that parents will be able to monitor their teens’ account and adjust their settings from their own Instagram accounts.

“The idea is to really make it simpler, so they [parents] have their own center that they can go and look and see what the privacy setting is for their teen,” she said.

Changes spurred by parents and teens

The changes for teen Instagram users come amid mounting evidence showing the dangers of social media for young users.

Social media use is linked with symptoms of depression and anxiety, body image issues, and lower life satisfaction for some teens and adolescents, research shows. Heavy social media use around the time adolescents go through puberty is linked with lower life satisfaction one year later, one large study found.

U.S. Surgeon General Dr. Vivek Murthy, who previously issued an advisory highlighting a crisis in youth mental health, has said he believes being on social media “does a disservice” to kids early in their teen years. Noting the crisis among kids, the American Psychological Association last year issued the first guidance of its kind to help teens use social media safely.

In January, while testifying at a Senate hearing, Mark Zuckerberg, the CEO of Meta, publicly apologized to parents, caregivers and loved ones of young people who they say were harmed due to social media use, telling them, “It’s terrible. No one should have to go through the things that your families have suffered.”

In his apology, Zuckerberg also emphasized Meta’s efforts on safety, adding, “This is why we invest so much and are going to continue doing industry-leading efforts to make sure that no one has to go through the things your families have had to suffer.”

Davis said the newly-announced changes to Instagram for teen users came after conversations with parents and teenagers around the world.

She said the company focused on making it simpler for parents to know how, when, and with whom their teens are engaging on Instagram.

“We’ve had these incremental changes along the way as we’ve been working back and forth with parents and experts,” Davis said of previous safety changes for teen users. “What we’re really trying to do here is standardize a lot of this approach.”

She added of the new features, “There are these broad protections that we have in place, and if your teen wants to change them, and they’re under the age of 16, they have to come to you for permission, they’ve got to invite you in. It’s just a different way of thinking about things.”

Parents and caregivers as well as teens can learn more about Teen Accounts by visiting Instagram.com/teenaccounts.

How much will the Fed cut interest rates? Experts weigh in

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(WASHINGTON) — Borrowers eager for the Federal Reserve to abandon high interest rates could not have scripted a better four-word declaration than the one on Friday from Fed Chair Jerome Powell: “The time has come.”

Powell indicated that the Fed would soon bring interest rates down from a 23-year high. The shift could lower borrowing costs for everything from credit cards to auto loans to mortgages.

The pace and scale of rate cuts remains unknown, however. A cautious approach could leave borrowers saddled with high costs for the next several years while an aggressive reset could ease loan rates substantially within months.

“The question now is how far and how fast should the Fed cut rates?” Mark Zandi, chief economist at Moody’s Analytics, said in a post on X on Sunday.

The chances of an interest rate cut at the Fed’s next meeting in September are all but certain, according to the CME FedWatch Tool, a measure of market sentiment.

Market observers are divided over whether the Fed will impose its typical cut of a quarter of a percentage point or opt for a larger half-point cut. The tool indicates a roughly 60% chance of a quarter-point cut and a 40% chance of a half-point cut.

Over the remainder of the year, the most likely scenario is a quarter-point rate cut at each of the Fed’s three scheduled meetings in September, November and December, the CME FedWatch Tool shows.

The Fed is guided by a dual mandate to keep inflation under control and maximize employment. In theory, low interest rates help stimulate economic activity and boost employment; high interest rates slow economic performance and ease inflation.

In recent months, the labor market has slowed alongside cooling inflation. That trend was highlighted last month by a weaker-than-expected jobs report that raised concern among some economists that the U.S. may be headed toward a recession.

Recent trends have shifted the Fed’s focus away from controlling inflation and toward ensuring a healthy labor market, Powell said Friday.

“A cooldown in the labor market is unmistakable,” Powell said, adding that he would let economic performance dictate the course of rate cuts.

“The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook and the balance of risks,” Powell said.

Gregory Daco, chief economist at accounting firm EY, said in a statement to ABC News that he expects a quarter-point rate cut at each of the Fed’s next three meetings in an effort to soften the ongoing economic slowdown. However, worries about an imminent recession are overstated, Daco added.

The Fed aims to “buffer the economic downshift,” Daco said.

Deutsche Bank, which also projects three quarter-point rate cuts before the end of the year, said in a note to clients on Friday that a weak jobs report early in September could push the Fed to opt for a larger half-point cut at its meeting later that month.

“The softer-than-expected July jobs report and recent bouts of market volatility have shifted risks towards the Fed cutting more aggressively upfront,” Deutsche Bank said.

Analysts differ widely over the course of interest rate cuts in the next year or two. Zandi said the Fed should bring interest rates down significantly from the current target rate of between 5.25% and 5.5%. By the end of next year, interest rates should stand at 3%, he added.

By contrast, former Treasury Secretary Larry Summers cautioned against an aggressive approach to interest rate cuts. “We need to be rather more cautious about the medium term outlook for monetary policy,” Summers said in a post on X on Saturday.

Still, Summers added, the need for some rate cutting is beyond question.

“Inflation is coming down. The economy is slowing. On current facts, absolutely the next move should be towards monetary policy easing,” Summers said.