Fearless Fund ends program for Black women, settling discrimination lawsuit
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.
(NEW YORK) — A surging stock market, low unemployment and robust growth — by just about every measure, the economy stood poised to deliver victory for Vice President Kamala Harris.
The exception, of course, was inflation, and it appears to have overshadowed other indicators. More than two-thirds of voters say the economy is in bad shape, according to the preliminary results of an ABC News exit poll.
Inflation likely shaped negative voter perceptions of the economy and helped fuel anger toward the party in power, just as it has done across the globe since the pandemic unleashed a wave of rapid price increases, experts told ABC News.
The political potency of inflation stems from the visceral, recurring sense of unease caused by high prices, experts added. That feeling leaves voters insecure about their future and desperate for a leader who can change the nation’s course.
“Inflation has a specific and special power in elections,” Chris Jackson, senior vice president of public affairs for Ipsos in the U.S., told ABC News. “It’s something people see in their face every day — every time they go to the grocery store or fill up their car.”
He added, “Inflation is present in people’s lives. It’s something they’re unhappy with and it’s something they rightly or wrongly blame on whoever is in charge.”
The pandemic set off an acute bout of inflation that impacted nearly every country across the world, when global supply chain blockages caused an imbalance between the availability of goods and the demand for them. In other words, too much money chased too few products.
Prices began to rise rapidly in the U.S. in 2021, catapulting the inflation rate to a peak of about 9% the following year. Inflation soared even higher in many other countries, including the likes of Brazil and England, where leaders faced an angry electorate.
In Brazil, where President Jair Bolsonaro cut taxes on fuel and electricity in an effort to slash prices over the months preceding an election that concluded in October 2022, the nation nevertheless replaced him with a leftwing challenger.
Earlier that year, in England, Prime Minister Liz Truss responded to the highest inflation in four decades with an economic policy centered on tax cuts and energy price controls. Her tenure in office lasted just 44 days before market reaction and political disarray led to her stepping down.
The post-pandemic pattern has exemplified a high rate of leadership change amid inflation crises around the world over the last half century, according to a study by Eurasia Group, a political risk consultancy firm. Examining 57 inflation shocks since 1970, the firm found government turnover in 58% of cases.
Further, when there was an election during or within two years of an inflation shock, it led to a change in government in roughly three out of every four instances, according to Eurasia Group.
“We’re seeing this trend on jet fuel after the pandemic,” said Robert Kahn, the managing director of global macro-geoeconomics at the New York-based Eurasia Group. “The pandemic inflation shock contributes to a sense of instability and a loss of confidence among people in their governments.”
Carola Binder, an economics professor at the University of Texas at Austin who studies the history of inflation in the U.S., characterized recent anti-incumbent sentiment in a slightly different way: “When people are experiencing inflation and suffering from it, they want to have someone or something to blame.”
Inflation has cooled dramatically over the past two years, now hovering near the Federal Reserve’s target rate of 2%. Even so, that progress hasn’t reversed a leap in prices that dates back to the pandemic. Since President Joe Biden took office in 2021, consumer prices have skyrocketed more than 20%.
The potential role of inflation in the U.S. election owes to a typical lag between when inflation comes down and when consumers acclimate to new price levels, since a lower inflation rate does not mean prices have come down but rather that they have begun to increase at a slower pace, experts told ABC News.
“When inflation comes back down, the prices of many critical items remain high, especially for people who are stretched and living paycheck to paycheck,” Kahn said.
Consumers will likely acclimate to current price levels over the coming months, but voters will remain sensitive to inflation, experts said.
President-elect Donald Trump’s proposals of heightened tariffs and the mass deportation of undocumented immigrants risk rekindling rapid price increases, some experts said.
When asked about whether inflation could reemerge as an important issue ahead of the next midterm elections in 2026, Jackson said: “If Republicans shoot themselves in the foot, absolutely.”
(WASHINGTON) — Social media platform TikTok is hurtling toward a U.S. ban that could upend its business and frustrate more than 150 million American users — unless President-elect Donald Trump finds a way to reverse the policy.
Trump, who boasts 14 million followers on TikTok, voiced opposition to the ban earlier this year. The policy, which orders TikTok to find a U.S. parent company or face a ban, is set to take effect on Jan. 19, a day before Trump’s inauguration.
An effort to eliminate the ban may present formidable political challenges and legal hurdles, experts told ABC News. The outcome could depend on support from an array of major institutions ranging from Congress and the Supreme Court to tech giants like Google and Oracle, they added.
The China-owned app has faced growing scrutiny from government officials over fears that user data could fall into the possession of the Chinese government and the app could be weaponized by China to spread misinformation.
There is little evidence that TikTok has shared U.S. user data with the Chinese government or that the Chinese government has asked the app to do so, cybersecurity experts previously told ABC News.
TikTok did not immediately respond to ABC News’ request for comment. Neither did Trump’s transition team.
The president is expected to try to stop the ban of TikTok after he takes office, The Washington Post reported on Tuesday, citing people familiar with his views on the matter.
Here’s what to know about the different ways that Trump could try to stop the TikTok ban, according to experts:
Push Congress to repeal the TikTok ban
The most straightforward way to reverse the policy would be a repeal of the law that enacted the ban in the first place, experts told ABC News.
A repeal would require passage in both houses of Congress, landing the measure on Trump’s desk for his signature.
“The easiest way is to ask Congress to reverse the ban,” Anupam Chander, a professor of law and technology at Georgetown University, told ABC News. But, he added, it isn’t as easy as it sounds.
Congress voted in favor of the ban only seven months ago. In the House of Representatives, the ban passed by an overwhelming margin of 352-65. In the Senate, 79 members voted in favor of the measure, while 18 opposed and 3 abstained.
A repeal effort carries political risks for Trump, since it could be perceived as conciliatory toward China, in contrast with the adversarial tone voiced by Trump on the campaign trail, James Lewis, a data security expert at the Center for Strategic and International Studies, told ABC News.
“It’s a political problem,” Lewis said, noting that Trump could soften potential backlash by seeking a reform of the law rather than an outright repeal.
Trump may not need Congress to repeal the ban. A lawsuit against the ban brought by TikTok on First Amendment grounds currently stands before a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit.
Experts who spoke to ABC News said they expect the court to rule against TikTok, but the company could then appeal, potentially sending the case to the Supreme Court before the ban takes effect. The Supreme Court may determine that the legal challenge holds sufficient merit to delay implementation of the ban, leading ultimately to a rejection of the law.
“The Supreme Court may want a crack at this,” Alan Rozenshtein, a law professor at the University of Minnesota who focuses on the First Amendment, told ABC News.
Refuse to enforce the TikTok ban
Instead of repealing the law or counting on court intervention, Trump could try to prevent the Justice Department from enforcing the measure, experts said.
The law orders distributors like Apple and Google to stop offering the social media platform in their app stores, and it requires cloud service providers like Oracle to withhold the infrastructure necessary for TikTok to operate.
Companies that violate the law risk a penalty of $5,000 for each user who accesses TikTok. “That adds up,” Rozenshtein said.
In theory, Trump’s Justice Department could opt against enforcement of the law, reassuring the likes of Apple and Oracle that the companies would not face prosecution in the event of a violation, experts said.
Along similar lines, the Trump administration could take up an interpretation of the ban that affords it wide latitude in finding that TikTok has complied with a requirement that it divest from parent company ByteDance, experts said.
In other words, even if TikTok has made little effort to comply with the law, the Trump administration could attempt a reading of the measure that finds the company has met the threshold necessary to avoid a ban, Rozenshtein said.
If Trump opts against enforcement, the move could still prove insufficient. Companies like Apple and Oracle may decide to comply with the ban anyway, since they could face legal risk if the Trump administration reverses its approach, Rozenshtein added.
“Trump is mercurial,” Rozenshtein said. “If you are Apple’s general counsel, do you really want this hanging over you?”
Help TikTok find a U.S. buyer
Finally, Trump could try to find a U.S. buyer for TikTok, allowing the platform to avoid a ban. This approach may appeal to Trump’s self-image as a business dealmaker, but time is running short for such a significant business transaction and TikTok has shown little appetite for it, experts said.
The law allows for a 90-day extension of the deadline for a TikTok sale, as long as the company is advancing toward an agreement. Under such a scenario, the deadline would move back to April, providing Trump with additional time.
“It’s possible that he’ll try to force TikTok to come to some kind of deal with American buyers,” Lewis said. “It’s not likely. TikTok will hold out as long as they can.”
China has signaled opposition to the sale of TikTok to a U.S. company, The Wall Street Journal reported in March.
Alternatively, Trump could seek a compromise measure in Congress that affords him additional time and wider latitude to establish a U.S.-based operation for TikTok, experts said. Or the Trump administration could offer up an interpretation of the law that gives it space to strike a compromise with TikTok.
TikTok previously proposed a solution called “Project Texas,” in which the company would keep all data on U.S. users within the country through a partnership with Oracle. When TikTok CEO Shou Chew testified before Congress last year, several members raised concern about a potential lack of third-party oversight in such an arrangement.
Trump could seek to assuage the concerns of members of Congress while reaching terms satisfactory to TikTok, Chander said.
“Trump may be able to do things that reassure the American people that the app is safe, and that it is bringing a lot of the programming here to U.S. soil,” Chander said.
(NEW YORK) — After once deriding cryptocurrency as a “scam,” former President Donald Trump on Monday formally threw his support behind World Liberty Financial, a crypto venture whose business model remains largely unclear but has already drawn scrutiny as a potential ethics headache for his administration if he returns to the White House in January.
Joined Monday by his two adult sons and others involved in the fledgling business, including billionaire donor Steve Witkoff, Trump declared in a livestream on X that “crypto is one of those things we have to do,” and suggested that he would work to limit regulation of the industry if elected.
“Right now, you have a very hostile [Security and Exchange Commission] … they’ve been very hostile toward crypto,” Trump said. “My attitude is different.”
Details about the venture, including Trump’s role and potential compensation, remain unclear. The company’s website, which bears an image of a backlit Trump speaking at a podium, suggests the platform will have its own crypto token, called $WL, and aspires to “empower our users to operate their finances … with no direct oversight of any government agencies or officials.”
Industry experts said the website provides few details about the company — including what it will offer, who will have access to its profits, and how the Trump family stands to make money from it. James Butterfill, the head of research at CoinShares, a digital asset management firm, told ABC News that the website contains little more than “buzzwords.”
Government ethics watchdogs consulted by ABC News were quick to point out potential conflicts of interest posed by a candidate for president launching or becoming otherwise involved with a new business within weeks of Election Day — particularly in an industry as polarizing and unregulated as crypto, in which users directly exchange digital currencies without the oversight of banks or the government.
Jordan Libowitz, a spokesperson for Citizens for Responsibility and Ethics in Washington, or CREW, said a future Trump administration would have wide latitude to impact crypto policy — and Trump’s own personal stake in the industry could potentially rub up against the best interests of the country.
“We’re still in the Wild West with crypto. It’s clear there is going to be some kind of regulation, but to what extent and how friendly they are to the industry, we don’t yet know,” Libowitz said. “The president obviously appoints the people in charge of that.”
Steven Cheung, a spokesperson for the Trump campaign, rejected any suggestion that Trump’s role in World Liberty Financial could pose an ethical dilemma if he’s reelected, calling Trump “the most ethical president in American history.”
“When President Trump first ran for office, he stepped away from his very successful and lucrative businesses because the job of saving America was the most important job he’d ever have,” Cheung said in a statement to ABC News. “Before he entered the White House, he ensured everything was done within the ethics guidelines set forth.”
In addition to Trump’s adult sons Donald Trump Jr. and Eric Trump, who have for months been promoting World Liberty Financial on social media, a so-called “white paper” first reported by CoinBase indicated that Trump’s youngest son, Barron, 18, would also play a role in the firm.
Witkoff, who appeared Monday on the X livestream, said he introduced the Trumps to two other partners in the venture, Zak Folkman and Chase Herro, both of whom have a colorful business history.
Herro, who previously called himself a “dirtbag of the internet” at a crypto conference in 2018, has said he has made millions from an ecommerce business after spending three years in jail for selling drugs when he was in high school. Folkman, who first joined forces with Herro in the ecommerce business more than a decade ago, has reportedly previously taught classes on “how to date hotter girls.”
On ABC’s Good Morning America on Tuesday, Witkoff — a longtime friend to Trump and one of his campaign’s biggest financial supporters — downplayed any potential conflict posed by Trump’s foray into crypto.
“If the president is elected, which I expect him to be, then everything that he — all of his of his ownership, his businesses, will be put in some sort of a trust.” Witkoff said. “His children, I would assume, will be involved in running it. And I doubt that, therefore, that there is any conflict.”
But Danielle Brian, the executive director of the Project On Government Oversight, said that would be nothing more than “window dressing.”
“A trust managed by family members will not eliminate the conflict of interest created by a sitting president owning any business,” Brian said.
Trump’s announcement on Monday marked his transition from a vocal skeptic of digital currencies to one of the industry’s most enthusiastic proponents. As president, he complained on Twitter that crypto markets were “highly volatile and based on thin air.” In 2021, shortly after leaving the White House, Trump called cryptocurrencies a “scam.”
But during his 2024 bid for the White House, Trump has cozied up to crypto interests.
In May, his campaign said it would begin accepting contributions in cryptocurrency. Trump has regularly hosted industry enthusiasts at his properties and, in July, at the annual Bitcoin Conference, he pledged to make the U.S. the “crypto super-power” of the world.
