Karen McFarlane (00:03): Hey, Brittany, how you doing?

Brittany S. Hale (00:05): Hi. I am well. How about you?

Karen McFarlane (00:08): I'm, I'm hanging in there. I'm happy to be talking to you about, you know, today's issues again, <laugh>.

Brittany S. Hale (00:13): Likewise, likewise. I like the blue in solidarity. I appreciate <laugh>.

Karen McFarlane (00:19): Well, I wanted to start off with you today, because I understand you have some very strong feelings about the new affirmative action ruling, and I, I thought it'd be great to share that.

Brittany S. Hale (00:32): Listen, Karen, I, I was gonna say, don't get me started, but it's too late.

Karen McFarlane (00:37): I've started, right? I did that on purpose. <Laugh>.

Brittany S. Hale (00:41): Yes. So, if you have not heard, uh, there is a lawsuit against Fearless Fund. Have you heard about this?

Karen McFarlane (00:53): I've heard about Fearless Fund, but you know, we've talk a little bit about what it is though, right?

Brittany S. Hale (00:58): Exactly. Yes. So there's this group called the American Alliance for Equal Rights, and they're alleging that Fearless Fund, by offering individual black entrepreneurs, black women entrepreneurs, $20,000 grants. It's open only to those. It's called the Fearless Drivers Grant Contest, only open to black women who are small business owners, while the American Alliance for Equal Rights alleges that Fearless Fund is violating their civil rights based on the Civil Rights Act of 1866. And, uh, this is an act that states that private contracts must be made and enforced without regard to race. So they say that this fund is violative of their civil rights, and they are suing of all organizations that offer race-based initiatives or grants to entrepreneurs of color. They chose Fearless Fund,

Karen McFarlane (02:09): Well, correct me if I'm wrong, I don't think I'm wrong, but it's the sameorganization that just won that lawsuit right. Against Harvard and, uh, um, UNC, you know, that struck down affirmative action

Brittany S. Hale (02:25): And

Karen McFarlane (02:25): Yeah. Right. So that is correct. Edward Blum, he's been working on this for, I don't know, over a decade, I think. So he finally got his victory in the court, and now he's moved on to Fearless Fund.

Brittany S. Hale (02:41): I am very curious to know what Edward does in his free time, other than to <laugh> wonder about ways to impede, entrepreneurs and students of color, uh, in their pursuit of the American dream. I don't think he does much else other than dream of ways to, to obstruct that, but yes, yes. Edward Blum's got a lot of, a lot of time on his hands.

Karen McFarlane (03:09): He's got a lot of focus. And, um, well, it's interesting when someone's so incredibly focused on something, they end up getting results. I mean, this is, this is persistence at its best. I was reading an article about him in the New York Times, right? And just like his philosophy around this whole thing. So he believes that race should not be a factor in any type of decision-making. I mean, on face value. I think we all believe that, right? Right?

Brittany S. Hale (03:36): Would be ideal, right? <laugh>,

Karen McFarlane (03:38): That's an ideal situation, and it is ignoring the fact that affirmative action was created to correct systemic inequalities in society, right? According to like a bunch of different factors, though, I think people just focus on affirmative action being just about race when it has so many other, um, qualities to it, right? That affirmative action was, was based around. But the thing that I thought was interesting when I was reading this New York Times article is that while we can agree that things should not be based on race, right? He doesn't believe that there is systemic racism in America. So this is what's fueling, you know, I might be simplifying it, but it's fueling his philosophy around eliminating race as a factor of decision-making.

Brittany S. Hale (04:32): Yeah. Yeah. And you know, it's, it's interesting because he chooses to, to say yes, you know, these systemic barriers don't exist. So he's ignoring the Fair Housing Act. He's ignoring the subsequent Civil Rights Act of 1964. Uh, he's ignoring, uh, the Americans with Disabilities Act, right? All of these acts that have been corrected measures, because although, uh, Edward and I agree, race should not be a factor, nor should gender color, creed, you know, ability, age. However, <laugh>, we exist in systems that were created without all of these people in mind, right? These systems were designed to advance the initiatives and the, the focus almost exclusively to the benefit of rich white men.

Karen McFarlane (05:42): Mm-Hmm. <affirmative>,

Brittany S. Hale (05:43): Rich, white, able bodied, heterosexual, cisgendered white men.

Karen McFarlane (05:52): Yes. We're ignoring all of that.

Brittany S. Hale (05:55): <laugh>, We're ignoring that piece,

Karen McFarlane (05:58): <laugh> Which is so, I mean, I guess I get it right. Everyone's, for the most part, ignoring that, right? Or, or at least it needs to be brought more to the forefront. And when it's brought to the forefront, it creates a lot of uncomfortability, which means no one wants to talk about it, and then we go back to ignore it again. So it creates this weird cycle. But what I, found so interesting about, the argument is that it might be a legal thing, right? He became very laser focused on that one piece, right? Although, again, Affirmative Action is about a bunch of different things, gender, economic status, you know, disability, etcetera. Um, race was the, was the scalpel, right? That he, you know, <laugh>, he put a scalpel around race.

Brittany S. Hale (06:48): Yes.

Karen McFarlane (06:49): And apparently it was very effective. It's the most polarizing attribute, right? And, but, but it has all these, these implications. And when asked like what he thought was the remedy, he was like, basically, that's not for me to figure out, you know? Now <laugh>, it's interesting though

Brittany S. Hale (07:12): He rip everything apart and then everyone else can figure out what to do,

Karen McFarlane (07:17): That feels very irresponsible in so many ways, although I'm just playing both sides for a second, right? Is although when you are forced to do something because you've gotten rid of a particular tool, you have to create new tools, right? Does that push society forward? You know? Um, so that's a bigger question. We don't have the answer now today, <laugh>, but, but I just think that, you know, the precision with which he used race, um, got him where he wants to go, and now he's focused on Fearless Fund, and I'll posit that he's focused on this particular firm and not some bigger organization because it's about achieving these small wins to set precedent, right? For the bigger wins. Um, I think he's just using his playbook all over again.

Brittany S. Hale (08:13): Absolutely. Absolutely. And that was going to be one of my questions to you, right? Well, first I'll say, uh, there's nothing wrong with considering the lens through which someone sees the world, right? As much as I disagree with Edward Blum's actions, I can understand the strategy. I can understand because at first blush, when constructing a straw man argument, right. it's to get something that everyone can really rally around. Yeah, absolutely. Race shouldn't be considered when it comes to private contracts, that would be fantastic. However, it's important that we consider the context in which Fearless Fund is existing, right? So we see that out of $241 billion in venture capital, Black founders get just 1% of that. And when you focus on black women,

Karen McFarlane (09:26): Mm-hmm, <affirmative>

Brittany S. Hale (09:26): Receiving venture capital, they don't even get half a percent of that funding, okay? And when we think about and compare, um, White founders, uh, as opposed to, to Black founders taking the, the gender piece out of it, they receive about $35 million more across the funding cycle than Black founders, than Latino founders, right? Or Latinas. So this idea of there already being an equal playing field and, and these, these Black women founders receiving a leg up, it's a farce. But I'll return back to my question, which is, why do you think he chose Fearless Fund?

Karen McFarlane (10:27): Hmm. Listen, I can only speculate because let's just be real. Fearless Fund is not giving out millions and millions and millions of dollars. Um, they're giving out $20,000 grants four times a year to a few people <laugh>, right? And $20,000 is not the millions of dollars that let's be real, would give lots of organizations a leg up, right? So why are you coming for this organization? Well, I think, you know, one reason is small wins, okay? Because it is small. And another, um, reason is, you know, when you are going after something, you attack the most vulnerable, right? I don't know how he zeroed in on Fearless Fund, but I'm just gonna focus on my speculation on Black women founders, right? Black women. And in many ways, you know, I don't like to view myself as vulnerable, but in many ways, in the broader scope of things, Black women are the most vulnerable groups in society, and it's very easy to come after them with vigor. And more than likely, they, you know, they'll probably get some support and stuff now, but probably on face value, they don't have that level of, you know, legal, that team around them that would've been prepared for something like this. So it's really taking advantage in, I think, just one of the worst ways possible. It feels very transparent to me. I would love to hear his argument as to why he selected this though, and then debate that.

Brittany S. Hale (12:13): Yeah. So, so he alleges that a White woman founder approached him and, and asked him to, to save her from the inequities

Karen McFarlane (12:25): <laugh> right there. Yeah.

Brittany S. Hale (12:26): From, from this, this, grant contest and alleges that there are 60 founders, both White and Asian, who have complained about the existence of Fearless Fund and the Fearless Fund Strivers Grant of $20,000. Now, when I think about the VC landscape, when we think about the numbers, when we think about the founders, my question has been, well, why not look at Kapor Capital? Right? Or, uh, which has been very loud and very unapologetic in its strategy to support and uplift traditionally under-resourced founders who are, for the most part, Black and Brown,

Karen McFarlane (13:23): Right?

Brittany S. Hale (13:25): Why not go after them? But as you said to rack up those wins, going after an organization perceived to be the most vulnerable is, is quite telling. So then my next question is, and you, you mentioned of course, that he is not really sure what happens after, right? He just wants to, to complete that, and then we move into the next space. So what do you think happens? I will note that this grant is offered in partnership with MasterCard. Mm-Hmm,

Karen McFarlane (14:11): <affirmative>, right?

Brittany S. Hale (14:12): Which has, I'm going to hazard a guess. I don't know for sure, but I would hazard a guess to say they have almost infinitely more resources than Fearless Fund. I don't say that to criticize Fearless Fund, but again, it's just the size of the organization.

Karen McFarlane (14:29): Right.

Brittany S. Hale (14:31): Do you think this lawsuit, considering how the Supreme Court ruled against the consideration of, of race when it comes to college admissions, do you think this lawsuit has legs? Do you think this will result in corporations pulling out of these types of initiatives?

Karen McFarlane (14:51): Yeah. I don't know what will happen in the court system, but what will definitely happen is organizations, employers, inside the workplace, they're, going to be thinking about how this is gonna affect them long term, right? They're gonna be standing up, hopefully they're standing up committees and groups to kind of have this conversation about the legalities of their practices. And this is, I think, a hard debate, right? Like, if you are truly committed to this work, then you to really start to unpack your organization and, and really focus on equity, and how do you build equity across these groups? And again, you're losing some tools that kind of helped you along that way. And now you have to build new tools and new competencies within your organization to counter those effects. And that, that's for organizations that are committed, that they've seen that, you know, diversity, equity, inclusion is a powerful asset to their organization, but as we know, a lot of them are still struggling with some of the basic things like hiring, right?

Karen McFarlane (16:07): So it's going to be even more of an uphill struggle. I do think that every organization should be looking at themselves internally, regardless of what is available to them, and really trying to push the envelope. You know, if I wanna see a silver lining around this, because we have to try, right? Is that I'm hoping it will push more innovation. I don't think it needed to be pushed in this way to be clear. But how will universities, how will, workplaces, how will they rethink their role in creating an equitable society? But also on the other side, how do historically excluded groups really use this system as it's been used against them to be used for them, right? So just like these 60 White and Asian women felt like they were, you know, being discriminated against and they took action, and I don't know the answer to this <laugh>, right? But are we taking the same sort of actions with the same vigor, right that they are, right? Yeah. What do we need to do as a, as a, as a people? And when I say as a people, whatever the groups are and the intersectionalities of those groups, how are we challenging the systems and demanding that type of change?

Brittany S. Hale (17:42): Yeah. You know, I, and then of course, you know, I'm gonna ask you the marketing question, but I've seen people say, well, well, why haven't Black and Brown founders done the same thing? Right? Why haven't they gone forward and sued VCs and sued other organizations that have excluded them? And it's a good question, but there are two major considerations I don't think people are aware of or fail to consider. The first of which is if you are an entrepreneur and you are seeking venture capital funding, it is an incredibly small community.

Karen McFarlane (18:24): Hmm.

Brittany S. Hale (18:25): So to sue one VC firm could potentially mean that you're dead in the water for any forthcoming opportunities anywhere else, right? Right. We all know that advancement, um, as much as we like to think it's about merit, it's largely based on relationships, right?

Karen McFarlane (18:44): Right

Brittany S. Hale (18:44): And you see that these relationships are deeply compromised, um, when we, when someone puts forth a lawsuit, right? And so that's one consideration additionally, is even if they were to put forth, a lawsuit, one would have to prove that the discrimination is intentional.

Karen McFarlane (19:08): Mm-hmm. <affirmative>, right?

Brittany S. Hale (19:11): Those gotcha moments. You know, those moments where the person tells you, Hey, we're, you know, we're not looking to be diverse, or we already have one of fill in, you know, this person's ethnic background. Those are few and far between. You're rarely going to get that smoking gun, right? You are going to get situations where you would have to make an inference. And that is often the, the challenge when dealing with bias, both conscious and unconscious in the workplace, right? We are not always in complete control of our faculties, but we do have preexisting beliefs of who is successful, who is a founder, who's marketable, right? Like these things, these things happen. So I think it's important to uplift that. I don't think it is been that Black and Brown founders have dropped the ball with these considerations. I think they've weighed the outcomes and ultimately have tried to, to make their way in an industry that largely has not been supportive of them much as they've done in many other industries, <laugh>, right? Because people have to survive, right? People want to be able to, to do what they can. And some have just sought alternate means of funding. But again, the question then becomes, you know, are people truly being treated equally when 99% of the funding goes to White men?

Karen McFarlane (21:06): Yeah. And those are two really great points. And the last one in particular around, well, relationship building is always the biggest barrier, right? So I think, again, that there are ways to hopefully help to counter that, but we are a social people, and we rely on referral networks far more than any other medium so, but it's about being conscious of that, right? But the second point around intention is so important because that has always been a major barrier. And maybe what we need, and I'm, I'm being very cavalier again in saying this is a new definition of what discrimination means. Mm-Hmm. Just because like you said, people aren't overt, you know, they've learned tactics and tools to either intent consciously or unconsciously, right? Um, still discriminate in ways that are less out loud or in your face. So maybe that's something, uh, we as a society need to unpack a little bit more and challenge that definition, um, to include intention. I mean, you know, obviously I'm not in the legal realm, that's your thing, but I watch a lot like law and law, law and order, and FBI, right? And <laugh>,

Brittany S. Hale (22:45): You know, we'll take it, we'll take it <laugh>.

Karen McFarlane (22:48): I think there's like some charges around, I'm just gonna, I'm gonna butcher it. But you know, that involves intent with murder and assault and all type of stuff. So there is some way to measure that for crime, right? This is just a different kind of crime as far as I'm concerned, you know what I mean? So I think we could do it.

Brittany S. Hale (23:08): And yeah. And so if we borrow that standard from criminal law, right? The preponderance of the evidence, meaning more likely than not,

Karen McFarlane (23:17): Right?

Brittany S. Hale (23:18): All of the evidence that you mentioned, you know, the intent to, to murder, right? So very rarely are you going to get someone on camera or on a recording saying, "Hey, I'm going to harm X person." But what jurors are allowed to consider are Google searches <laugh>, right? <laugh>, they're allowed to consider, the EZpass, or the traffic cameras and all of these things, right? So if X person goes missing on Thursday at 7:00 PM they're looking at the defendant to say, okay, well this person, did they have an alibi? They recently Googled how to get rid of a body. You know, all of these things that more likely than not suggest that something's going to happen, that people are going to kill me, because they're going to say, well, murder is beyond a reasonable doubt.

Brittany S. Hale (24:18): It's not by the preponderance of the evidence. So has to be beyond a reasonable doubt, right? That all of this evidence, you know, when considered beyond a reasonable doubt that this person created this space. But if we bring it back to the civil realm, if we bring it back to this lawsuit, and when we think about discrimination, it has to be by a preponderance of the evidence, right? Does it make sense when we look at portfolios, when we look atthe pitches, when we look at the feedback from the pitches, does it make sense? Is it more likely than not that a certain type of founder is being discriminated against? Mm-Hmm.

Karen McFarlane (25:10): <affirmative>,

Brittany S. Hale (25:10): Is it more likely than not that there's some sort of difference being made? So we've talked before about promoter versus, um, prevention questions. So when a founder is doing a pitch, there are two types of questions. There's a promotion question, and that question is really what we would considered a volley, right? It's a question that's meant to highlight this person's knowledge of their industry. It's meant to give them the opportunity to show just how well versed they are,

Karen McFarlane (25:46): Right?

Brittany S. Hale (25:48): Conversely, you have prevention questions, and those are what we commonly think of as a gotcha question, right? Those are the questions meant to humiliate or embarrass, or at the very least, highlight the fact or the belief that this founder is not, well versed in their industry, right? It's a, it's a means to uncover what the investor believes, which is that this person is not a leader and should not be leading a company and is not worth investing in. Can you guess which ones women, especially women of color, tend to get more of?

Karen McFarlane (26:32): The latter, for sure. <laugh>.

Brittany S. Hale (26:34): Exactly. Right? And that is, um, is it because the, the businesses that they're creating are so much more different than other people's? Sometimes, but they're present in health and wellness, financial services, edtech, legaltech, right? They're not speaking to niche markets all the time, right? It's, however, they do look vastly different. Their experiences have been vastly different than other founders. And therefore, that raises a flag of alarm to that investor to say, Hmm, let me see if she really knows what she's talking about. Let me see if I can quiz her, and I'm gonna ask her this prevention question just to see how well-versed she is. That's an experience that people who are not women, people who are not women of color, very rarely have to deal with <laugh>, right? So that's the, that's the difference. Um, so I wanted to get back to the marketing space because I'm curious to know, one, how can companies who have very recently affirmed their commitment to advancing equity within their industries? How can they use this as a marketing opportunity and through your lens, how can founders use it as a marketing opportunity?

Karen McFarlane (28:11): Yeah. I think that it doesn't change the lens, right? Like, if you are committed to diversity, equity, and inclusion, and those are the principles that you're focused on, then they should filter throughout your leadership, throughout your different departments, through marketing, right? So specifically marketing that is, that should live within your brand and your messaging, right?cAs it filters down into your campaigns, you really want to be inclusive of the different audiences that you're trying to serve, the ones that you have today and the ones that you want tomorrow. And you should be, you know, celebrating the achievements of your employees, of your customers, all of your partners, and highlighting the areas in which diversity, equity, inclusion, and belonging, all of the attributes that you have ascribed to in your organization, you should be celebrating them both inside your organization and outside your organization by showcasing that, right?

Karen McFarlane (29:14): Um, you know, you should be advocates for change, whatever that means, right? You should be engaging your community. There are very specific things you can still do, which people have already been doing around supplier diversity and you canlean in to a lot of those programs in a meaningful way, because we do know that diversity leads to better outcomes. And so, I don't see in this moment, and I'm sure, you know, if we kind of dive down into very specific areas, but on a very high level, I don't see where anything changes for your commitments despite what legal challenges might be out there. But what is also true across every department, across every organization for founders, for marketers, is that you need to check your bias, right? And create filters for that, or metrics for that.

Karen McFarlane (30:11): Like, look at the data, analyze yourself and if you are a fund, um, that caters to everyone, right? Ask yourself, look at your numbers, and if your numbers skew a certain way, ask yourself why. What's happening here, right? And you have to look at everything on a macro level, but also an individual level. So this is a lot of work to do, but it's important work to do, and it's your responsibility to do it, to create economic vitality for all of society, not just certain groups. So I think on a high level, that's my advice, but it's also easier said than done. And it's also, you also have to walk without fear because if you're constantly thinking about what may come down the pike that's gonna challenge your efforts, that means you're just being responsive to outside forces when you need to be proactive and committed to your purpose. Does that make sense?

Brittany S. Hale (31:22): That makes a lot of sense. <laugh>, I'm proverbially, snapping, <laugh>, <laugh>. Yeah. All of this. Yeah. Again, it just makes good financial sense, good business sense, right? Investing is all about diversification of your portfolio, because you don't want to overinvest in one area because that heightens risk, right? So, from a, from a space where we're thinking of someone's business acumen, the question then becomes, are you really, really, really willing to lose out on opportunities in wealth generation because of bias? <laugh>?

Karen McFarlane (32:21): That, that is the question. <laugh>, that's the question. I think that's the question we need to leave everyone with. Do you wanna miss out on the money because of your bias? <laugh>,

Brittany S. Hale (32:34): Right? When we're clear that the color that matters most is greed, at least within the United States.

Karen McFarlane (32:43): There you go. There you go. <laugh>. Oh, Brittany, you know what? I know. We could talk about this for hours. All right. We can, but <laugh> and, and we could we'll continue, right? <laugh>, we got lots of things to talk about because

Brittany S. Hale (32:59): We have a lot to talk about. You're absolutely, absolutely, absolutely right. So <laugh>.

Karen McFarlane (33:04): So until

Brittany S. Hale (33:05): As always, it's a pleasure speaking with you, Karen.

Karen McFarlane (33:07): You too. Until next time.

Brittany S. Hale (33:10): Until next time, be well.

Karen McFarlane (33:12): Be well.