The Great Upheaval is here. The phrase refers to Big Tech beginning to cut back on some of the diversity, equity and inclusion (DEI) programs implemented shortly after the killing of George Floyd. More recently, Zoom announced it fired the PPC team. Google and Meta have began to be defunded their DEI programs, and funding to Black founders continues to decline. Lawsuits have been filed targeting DEI programs, forcing companies to now hide their integration efforts while billionaires they are fighting in X on whether PPC’s initiatives are discriminatory or not.
It’s clear that this year will be a turning point for PPC, especially as states continue to ban affirmative action and with the presidential election just around the corner. Here are all the stories you need to read to stay up-to-date on DEI’s ongoing tech backlash.
This list will be updated, so keep checking back.
Read about the AAER vs. Fearless Fund lawsuit
In August 2023, the American Alliance for Equal Rights (AAER), founded by Edward Bloom, the man who helped overturn affirmative action in education, filed a lawsuit against the venture fund Fearless Fund for offering business grants to black women. AAER claimed the grant discriminated against white and Asian American founders. The Fund and AAER are fighting the case in court, and currently, the Fearless Fund is not allowed to make grants to other black women.
On Instagram, Arian Simone, the Fund’s CEO, said the lawsuit has hurt the fund financially, as it has lost millions in potential commitments and faced staff cuts, low cash reserves, expensive legal bills and threatening letters. The impact of the lawsuit, however, could be much deeper than just affecting one fund and could have ripple effects throughout the ecosystem.
But the Fearless Fund isn’t the only one being sued. The Small Business Administration, the Minority Business Development Agency, and even smaller companies like Hello Alice are being targeted and sued for trying to implement various grant programs.
Read what critics say about PPC
The rhetoric against PPC has increased dramatically. Many big names in the venture, such as Elon Musk, Peter Thiel and Y Combinator founder Paul Graham, have shared sentiments against DEI, while only a few, such as Mark Cuban, have voiced their support. This divide is sure to last and only deepen as billionaires continue to use their power – and their influence – to make their views heard.
At the same time, there are many who do try to change and become more inclusive. Change takes time, however, and some of the promises made have not been fulfilled.
Read how governments handle PPC
California passed a bill last year that will soon require venture capital firms in the state to disclose the diversity breakdown of the founders they back. Some are heralding the bill as progress in a notoriously opaque industry.
However, California is not the only state looking to address diversity. Massachusetts is seeking to pass a bill that would expand workplace laws to the venture capital industry. New York business firms have come together informally to form an alliance to advocate for more diversity. There is excitement around these initiatives, but also some hesitation.
Rep. Emanuel Cleaver, who co-chairs the Congressional Black Caucus, is trying to pass a bill in Congress that would make endowment investments more transparent. He took a jab and said that some educational institutions in the country were downright “mean” to him and his efforts.
PPC has become a hot topic in red states, as many have moved to ban affirmative action. Many tech hubs are actually just blue towns, meaning more liberal-leaning cities within red or more conservative states. These include Tulsa, Atlanta, Miami, and Austin, and all are at the forefront of helping make technology more accessible to people outside the Bay Area. But will their ruling states put a dagger to all this progress?
Governor Ron DeSantis, for example, is leading the way in passing measures against PPC. From book bans to speech restrictions, he is also one of the few governors to take aim at ESG investing, proposing a move that could affect various fund managers in the state of Florida.
Nationally, the Congressional Black Caucus (CBC) is committed to learning more about what’s happening in technology. He recently wrote letters to OpenAI and the Department of Labor to see how the tech industry is trying to support black talent during this time.
OpenAI did respond to CBC, and we got the scoop on what happened next.
Read the latest PPC funding figures
Funding to Black founders has continued to decline since 2020, and last year was no different.
Read PPC’s point of view from abroad
Industries abroad look to the United States, including how marginalized founders are treated. Stay updated on how global venture ecosystems are handling DEI and what it says about progress in the US
France is a notoriously difficult ecosystem for Black Founders. Learn how the country navigates one of the most opaque entrepreneurial landscapes for people of color.
The UK, meanwhile, has made great strides in funding Black founders.
