DEI Response: Stay informed on the latest legal and business challenges

The Great Rollback is here. The phrase refers to Big Tech beginning to cut some of the diversity, equity, and inclusion (DEI) programs that were implemented shortly after the murder of George Floyd. Zoom recently announced this fired its DEI team. Google and Meta do have that started to defund their DEI programs, and funding for Black founders continues to decline. Lawsuits have been filed against DEI programs, forcing companies to hide their inclusion efforts now as billionaires have an argument about X on whether DEI initiatives are discriminatory or not.

It's clear that this year will be a turning point for DEI, especially as states continue to ban affirmative action measures and the presidential election is just around the corner. Here are all the stories you need to read to stay on top of developments in the ongoing DEI response to technology.

This list is being updated, so check back often.

Read more about the AAER vs. Fearless Fund lawsuit

In August 2023, the American Alliance for Equal Rights (AAER), founded by Edward Blum, 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. The AAER claimed that the grant discriminates against white and Asian American founders. The Fund and AAER are fighting the case in court, and currently the Fearless Fund is no longer allowed to award grants to black women.

On InstagramArian Simone, the Fund's CEO, said the lawsuit has hurt the fund financially as it has lost millions in potential liabilities and faced staff cuts, low cash flows, expensive legal bills and threatening letters. However, the impact of the lawsuit could go much deeper than just affecting one fund, and could have a ripple effect across the entire ecosystem.

But 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 subsidy schemes.

Read what critics are saying about DEI

Anti-DEI rhetoric has increased dramatically. Many big names in the business, like Elon Musk, Peter Thiel, and Y Combinator founder Paul Graham, have shared their feelings against DEI, while only a few, like Mark Cuban, have expressed support for it. These divisions are sure to continue and will only deepen as billionaires continue to wield their power – and influence – to make their opinions heard.

At the same time, there are many who are indeed trying to change and become more inclusive. However, change takes time and some of the promises made have not been kept.

Read how governments deal with DEI

California passed a bill last year that will soon require venture capital firms in the state to disclose the diversity analysis of the founders they back. Some are heralding the bill as progress in a notoriously opaque industry.

However, California isn't the only state looking to address diversity. Massachusetts wants to pass a bill that would extend workplace laws to the venture industry; New York City venture firms came together informally to create an alliance in support of greater diversity. There is excitement around these initiatives, but also some hesitation.

Rep. Emanuel Cleaver, co-chair of the Congressional Black Caucus, has been trying to pass a bill in Congress that would make investing capital transactions more transparent. Hitting a snag, he said a few educational institutions in the country have been downright “nasty” to him and his efforts.

DEI has become a hotbed issue in red states as many have banned affirmative action measures. Many tech hubs are actually just blue cities, that is, more liberal-oriented cities, within red or more conservative-oriented states. These include Tulsa, Atlanta, Miami and Austin, and all are leading the way in helping make technology more accessible to people outside the Bay Area. But will their governing states put a damper on all that progress?

For example, Gov. Ron DeSantis is a leader in passing anti-DEI measures. From book bans to speech restrictions, he is also one of a handful of governors to focus on ESG investing, proposing a move that could impact several fund managers in the state of Florida.

On a national level, the Congressional Black Caucus (CBC) has made an effort to learn more about what's happening in technology. It recently wrote letters to OpenAI and the Department of Labor to see how the tech industry plans to support black talent during this time.

OpenAI actually responded to the CBC and we got the scoop on what happened next.

Read the latest DEI funding data

Funding for Black founders has continued to decline since 2020, and last year was no different.

Read the DEI vision from abroad

Industries abroad are looking to the United States, including in how marginalized founders are treated. Stay up to date on how global venture ecosystems are addressing DEI and what it says about progress in the US

France is a notoriously difficult ecosystem for Black Founders. Learn how the country is navigating one of the most opaque business landscapes for people of color.

Britain, meanwhile, has made a lot of progress in funding black founders.

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