I Run a VC Fund for Women of Color. Here’s How to Stand Out.

• Arian Simone is the cofounder of Fearless Fund, which supports businesses run by women of color.
• Investors include Mastercard and PayPal, and she’s supported 31 consumer and tech companies so far.
• Here’s her story and advice on how to stand out to investors, as told to writer Claire Turrell.

This as-told-to essay is based on a conversation with Arian Simone, the 41-year-old CEO of Fearless Fund in Atlanta, Georgia. It has been edited for length and clarity.

When I was in college in Florida and raising capital for my women’s-apparel company, I learned that very few people who cut the checks looked like me. Right before the grand opening of my store in 2002, I made a promise to myself that one day I would become the business investor I was looking for.

When I graduated, I closed my business and moved to Los Angeles to work for Nelly’s AppleBottoms jeans brand and place product on celebrities. Then someone who’d seen my work offered me some freelance PR and marketing work. They then referred me to other companies, and I started building my Rolodex of contacts. In August 2004, I launched my own PR company servicing Disney, Universal, and Sony Pictures in Los Angeles.

While I was launching my own business, I never forgot the pledge I made to myself. I supported friends’ businesses as an angel investor, but since I knew Black women receive less than 1% of venture-capital funding, I wanted to do more. In 2018, Ayana Parsons, who I met at Florida A&M’s business school, and I decided to launch Fearless Fund, which supports early-stage startups founded by women of color.

I’d moved to Atlanta to be closer to family, and the forward-thinking city was the perfect place to launch our fund. I left my PR company to focus on the launch. It took about a year to complete the legal paperwork, become SEC-regulated, and establish ourselves as a fund.

Ayana and I started to raise aggressively in 2019 

If I said it was easy, I would be lying. I went two years without a salary to start the fund, but I kept going because I knew how many people would eventually benefit from it. As the VC industry was new to me, I sought out mentors and cold emailed Rodney Sampson, a professor of entrepreneurship at Morehouse College in Atlanta, and Tracy Gray, a venture capitalist of The 22 Fund. I told them that I wanted to launch a VC fund for women of color and they immediately offered their help.

While creating the fund, we also built the Fearless Foundation that holds workshops, online classes, and conferences for entrepreneurs. We later followed up by creating the Get Ready Venture Program, which provides founders with the knowledge, grants, and tools they need to build scalable, venture-attractive companies. We now have 54,000 followers on Instagram, and word quickly spread among founders when we said we were creating a fund like this.

Fundraising proved to be a slow process

We initially set a goal to raise $5 million. While we were lucky to attract individual investors like my friend Keshia Knight Pulliam from Tyler Perry’s “House of Payne,” we realized we needed to focus on attracting institutional money.

The first team we met with was the nonprofit-lending institution Local Initiatives Support Corporation, which made a $750,000 investment in October 2020. We explained that women of color typically feel more comfortable pitching to women of color. We also showed how we supported our entrepreneurs by assisting them with marketing, recruitment, digital, and mentor-matching.

As soon as LISC invested, it created a domino effect, and PayPal, Bank of America, and Mastercard came on board. We decided to increase our target and set a new goal of $25 million.

Rather than wait until we reached our new target, we started investing in startups and writing checks for up to $500,000. Our early investments included the rain-hat company Hairbrella, which Tracey Pickett, an attorney, founded; EnrichHer, a fintech platform for women entrepreneurs; and Ellis Island Tea, which Nailah Ellis-Brown founded. We were able to say, “Look at their traction, look at their team, look at their product-market fit — they are onto something amazing.” Instead of using graphs on a PowerPoint to demonstrate to potential investors what we could achieve, we used these live examples of what our investments could do to raise more money.

We’ve since supported 31 consumer and tech companies, and after two years we closed our first fundraising round in November 2021, which reached $25 million. We’ve also opened our second round and aim to raise a lot more. 

This space needs more capital. It’s going to take trillions of dollars to move the needle from 0.34%, which women of color presently receive in VC funding, so we’re just the start.

Here’s my advice for startup founders seeking funding.

There are 4 key indicators we look at when speaking to a potential portfolio company 

We look to see what their brand story is, what their traction is in the marketplace, how strong their team is, and how good their product is. If you’ve passed those four, you’ve passed the test.

Traction isn’t necessarily money. The tech industry is capital intensive just to get going. So your traction may be that you have 100,000 users. For example, when Instagram was sold for a billion dollars, it hadn’t made one dollar in revenue.

Investors may watch you for some time, so share your successes

We get 1,000 applications in a week, but one that stood out for me was Pickett of Hairbrella. She’s a prime example of having a great team, great product, and great brand story, but when I first met her in June 2019, her traction wasn’t fully there. She was only making $1,500 in sales for the month, and when we invest in a CPG company, we want its sales to be between $500,000 and $1 million. But I had a conviction — a gut feeling. 

So I followed her on social media and waited to see what would unfold. In September 2019, she posted on social media about having a six-figure month. Then she did the same in October, November, and December, so in January I called her and asked if she was still interested in funding. She said, “I sure am. I’ve just booked ‘Good Morning America’ and they told me to be prepared for a six-figure day.”

Some VCs will invest and others will also choose to mentor

Some venture-capital firms are passive investors, while others are more active. Think about what type of investor you want as you go into the fundraising process so you can find a match that’s right for you. 

We provide our entrepreneurs with a lot of support. We have marketing agencies on board to help them with market strategies, influencer marketing, and digital marketing. We also have a talent agency to help them with C-Suite-level talent, and we have a mentorship program. We assign each of our 15 team members a number of companies to support, and they check in with each at least once a month.