Article written by Anna Patton | Published by Pioneers Post on 22 August 2023

Legal action accusing a US venture capital fund of racial discrimination, because it invests in Black women business owners, prompts anger – and raises questions about the future of race-based policies.

Kevin Christopher, GAIL North America board member and founder and principal at Rockridge Law contributes his thoughts to this article by Pioneers Post.

Federal- and state-funded programmes may be more susceptible to legal action than those relying on private money, Christopher said. In particular, the State Small Business Credit Initiative or SSBCI distributed federal money to states for various investment purposes, and in some states has been used to ringfence capital for minority entrepreneurs and even minority investors.

Impact funds could also avoid potential legal action by “flipping the narrative” to focus on an underserved market, rather than on the demographic profile of the founders. For example, a core criteria could be how the potential investee would connect with the target market that the fund wishes to serve. 

Pioneers Post, 22 August 2023