Hi, fintech fam! 💜

Did you miss me? I sure as hell missed you.

Between writing a twice-weekly newsletter, hosting two Fintech Is Femme Summits, penning my 350-page book, and zipping around for speaking engagements, I finally hit burnout.

I knew I needed a real break—so I took one! I lounged on the beach and meditated on this amazing platform and community's future; now, I’m back, recharged, and ready for action.

We’ve got an exciting lineup for the rest of the year. Another Fintech Is Femme Summit (save the date for September 9!) and the launch of my debut book, Fintech Feminists, which is also becoming an audiobook!

But that’s not all. I want to create content and experiences that genuinely help you. I’ve included a quick 3-question survey at the end of this newsletter to help improve the Fintech Is Femme ecosystem and make it work for you. I can’t wait to read your feedback!

Now, let’s dive into a news story we need to amplify. I’m picking up right where we left off a month ago.

Let’s get back to it!

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INCLUSION

Fearless Fund’s Legal Battle and Its Impact on Black Female Fintech Founders. Plus, Insights From Stacey Abrams

The recent suspension of Fearless Fund’s grant program for Black women business owners by a U.S. federal court of appeals has sent shockwaves through corporate America that can be felt by fintech founders. 

This decision, influenced by a lawsuit from the American Alliance for Equal Rights, spearheaded by Edward Blum, highlights Black female entrepreneurs' ongoing challenges in accessing capital.

After the court's decision in early June, a female venture capitalist shared with me that Limited Partners (LPs) are retreating from funds aimed at investing in women, particularly women of color. This hesitation directly results from the uncertainty and legal challenges surrounding diversity-focused funding initiatives.

One fintech founder has already felt the sting of this setback. 

Sheena Allen, founder of the neobank CapWay and a recipient of Fearless Fund’s investment, is a prime example of the adverse effects.

As reported by Reuters, Allen had to take down her company’s website after funding dried up, a situation exacerbated by the broader difficulties fintech startups face this year. However, for Black female founders, the challenge is even more pronounced. 

The critical need for later-stage funding, such as Series B rounds, remains unmet, with only 1 in 10,000 women in fintech achieving this milestone.

These funding gaps are significant because fintech ventures require substantial capital. 

Unlike other industries where a lean startup approach might work, fintech companies must establish robust infrastructure, compliance systems, and secure platforms before or soon after launch. 

Allen founded CapWay in 2018 to offer essential financial services to unbanked American households. By October 2021, CapWay had partnered with Visa to provide a debit card with no hidden fees and a comprehensive financial literacy program. Despite these achievements, Allen is now contemplating pivoting or shutting down due to funding challenges.

The disparity in venture capital distribution is stark. While male founders often secure funding with just an idea, female founders, who statistically perform 63% better on average, struggle to obtain the necessary capital.

This discrepancy is even more severe for women of color, who receive a minuscule fraction of venture capital funds. Fearless Fund highlighted in its brief that only 0.13% of venture capital goes to Black women-owned businesses.

Fearless Fund has been instrumental in supporting Black female entrepreneurs. It has invested $26.5 million in 40 startups led by women of color.

Despite this, the lawsuit has led to some limited partners withdrawing their commitments, and one of its co-founders, Ayana Parsons, has stepped down as general partner and COO as the company battles the lawsuit. 

The suspension of the Strivers Grant program, which provided crucial early-stage grants to Black-woman-owned businesses, is part of a broader trend of opposition to diversity, equity, and inclusion (DEI) initiatives.

Fearless Fund is now considering its next steps, including a possible trial. CEO Arian Simone has called for an Executive Order to protect DEI funding and a legislative act to support it.

As I write this column, I’ve also thought about how today, July 9, is Black Women’s Equal Pay Day—one of those yearly observances that serves as a reminder, a marker, a warning, according to the National Organization for Women. 

Black women typically earn only 66 cents on the dollar compared to what white, non-Hispanic men make, according to the Institute for Women’s Policy Research (IWPR). This wage gap compounds Black female entrepreneurs' challenges, making it even more difficult for them to secure the funding and resources they need.

The implications of this legal battle extend beyond the immediate financial strain.

The fintech sector, which plays a critical role in the lifeblood of our economy, relies on diverse leadership to innovate and address a wide range of financial needs.

When brilliant founders like Allen struggle to secure funding despite having a working product and a clear mission, it underscores the systemic issues within the venture capital ecosystem that continue to hinder innovation and progress in our financial system. 

The legal battle against Fearless Fund is more than just a fight over grants; it's a pivotal moment that could shape the future of the startups we see influencing fintech. 

What’s The Plan? 

From June 23 to 25, Stacey Abrams, political leader and fintech entrepreneur; Dr. Sesha Joi Moon, former Chief Diversity Officer of the US House of Representatives; and Ayana Parsons, co-founder of Fearless Fund, gathered at the 2024 ForbesBLK Summit in Atlanta for a panel discussion addressing the corporate and political attacks on diversity, equity, and inclusion programs. 

Abrams emphasized the importance of understanding what DEI truly represents and the reasons behind the backlash. 

“DEI is not this reductive narrative that they like to pretend was born in a laboratory in 2022,” Abrams said during the panel. “DEI describes 240-plus years of movement building.

Whether we’re talking about reconstruction, civil rights, the LGBTQIA fight, women’s rights, abortion rights, labor rights—if we’ve had to expand our notion of diversity, correct for access to equity, or demand inclusion, it is DEI.”

Diversity means all people. 

Equity is a fair opportunity. 

Inclusion means a pathway to the American Dream. 

“There are three ways to get there: education, what you know; the economy, what you do; and election, who’s in charge of making sure you have the rest of what you need,” she said. “If we do not have access, diversity in our process, or inclusion for all, then we do not have a real opportunity for the American Dream.”

Then, we must understand the “why” behind the attacks on DEI programs like Fearless Fund’s grants.

Abrams pointed out that the backlash against DEI stems from a fear of progress and the power it brings.

Since Black women are making progress, even if small, defenders of the status quo will delegitimize, litigate against, and legislate away DEI initiatives because they threaten the status quo.

“They have the strategy to litigate against funds like Fearless Fund because they know that over the last 240 years, we have built an infrastructure of law, regulation, and policy that makes the promise of America real,” she said. “When the Minority Business Development Agency becomes fully federally authorized for the first time in 30 years, of course, it will be under attack.”

When corporate initiatives mean that more people of color, more Black people get access to capital to build not just a business but a community, they will attack it, too. 

“They have a reductive sense that if more of us have something, they have less,” she said. “We know that’s not true. We know that if we close the racial wealth gap in this country, we will add a trillion dollars in economic activity. That’s what this is about.”

While you may be thinking about how you will move forward without facing your company backlash, Abrams has a few ideas. The first is to stand firm in your beliefs. 

“If you can convince us we’re wrong by telling us we shouldn’t use DEI because somebody doesn’t like it, you can call me out of my name. I’m still going to call myself Stacey,” she said. “Why would we abandon our principles because someone who doesn’t believe in those principles mocks them?

When they litigate, we should not capitulate; we should fight back, which Ayana and Fearless Fund are doing.” 

Ultimately, we must stop allowing them to convince us we’ve lost before we even fight. And always, always remember that the legislative power is real. 

Tactical Actions for Today

Parsons, the co-founder of Fearless Fund, highlighted the importance of representation and the need for intentional efforts to continue to hire, advance, promote, and develop Black people. 

“Pour into them because representation matters,” she said. “Throughout my 30 years of working in spaces where I am often the only Black person in the room, I’ve been intentional about driving change. It starts with us.” 

Her advice: Aspire to be your absolute best and have as much power as possible. 

“Power used for positive good transforms communities and nations, and you are all leaders,” Parsons said. “When you look around for leadership, remember it is you. Now is the time. That is my very specific advice to everyone in this room.”

Dr. Joi Moon, despite her office being dissolved earlier this year, remains optimistic. She believes the increased resistance signifies progress and encourages everyone to stay motivated. 

Oppressive systems clamp down because they fear the advancements being made.

Abrams provided a clear call to action for business leaders:

1. Stand Firm: “Are we telling our businesses that they have to make the same case to dismantle DEI as they do to sustain it? If they interrogate themselves, they’ll find they make more money with DEI than without it. So, hold them accountable,” she said. 

2. Speak Up: “We’ve got to tell our stories. We are winning, but they have an echo chamber while we have a vacuum,” she said. “They tell a lie a thousand times until it sounds like the truth. We tell the truth once, and if nobody claps, we stop talking. We’ve got to tell our truth over and over again.”

3. Stay Connected: Unity is our strength. By staying connected and supporting each other, we can continue to make progress. 

As we move forward, it's essential to recognize and support Black female founders' vital contributions and ensure they receive the backing they need to thrive. 

The success of fintech, and indeed the broader economy, depends on it.

_{WTF ELSE?}

• How AI is driving the venture capital market 

• Bain Capital reportedly closing in on deal to acquire Envestnet

• HHS announces $27.5M in funding to address women's behavioral health needs

• Healthcare-focused fintech startup Care.fi raises $2.6M

• The German government owns around $2 billion in bitcoin — and it's freaking out crypto investors

• What US financial services and fintech can learn from Singapore’s push to establish itself as an AI hub

_{I WANT IT, I GOT IT}

• 📚 Today’s Read: This opinion essay by Melinda French Gates: The Enemies of Progress Play Offense. I Want to Help Even the Match. She shares why she left the Bill and Melinda Gates Foundation and what she’s up to next.

• 👀 Today’s Watch: I finally got around to watching all of Avatar: The Last Airbender on Netflix during my break. I stuck with the original anime version, and honestly, I never thought a cartoon could be so healing.

• 🍣 Today’s Eats: One of my favorite things about traveling to other countries? The food. Nothing connects you with culture quite like the cuisine. While hitting the beach in Spain, I couldn’t stop eating squid ink paella — here’s a recipe if you want to try to make it yourself!

_{SURVEY SAYS…}

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_FINTUNES

🎵 Charli xcx - Apple

Remember when Megan Thee Stallion kicked off the whole “hot girl” summer vibe? Well, every year since, a new trend has swept through music and pop culture.

This summer, 2024, it’s all about Charli xcx and her album, Brat. Welcome to the “Brat” girl summer! This movement is all about shaking off negative vibes, setting boundaries, and focusing on healing.

And honestly, I’m totally here for it.

Here are a few more ways I can help you:

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That’s all for now! See you Thursday!

Love,

Nicole 💜