In 2024, California Governor Gavin Newsom signed Senate Bill 164, known as the Fair Investment Practices by Venture Capital Companies (FIPVCC). This law requires certain venture capital companies with ties to California to gather and report demographic information about the founding team members of businesses in which they invest.
Starting March 1, 2026, any venture capital company that qualifies as a “Covered Entity” must register with the Department of Financial Protection and Innovation (DFPI), survey each founding team member of businesses it invested in during the previous year, and submit an anonymized, aggregated report to the DFPI. The registration portal is not yet available but will be launched soon on the DFPI website. Companies can sign up for email updates on the site.
The reporting process continues annually. Covered Entities must submit their first reports by April 1, 2026, covering investments made in calendar year 2025. Links to the required survey and reporting forms are provided on the DFPI website under its VCC Reporting Program.
Entities required to register include those that qualify as a “venture capital company” according to FIPVCC definitions—such as entities where at least half of assets are venture capital investments annually, or those defined as “venture capital funds” under federal law or “venture capital operating companies” under ERISA. To be considered a Covered Entity under FIPVCC, these companies must primarily invest in startup or early-stage companies and meet additional criteria such as being headquartered in California, having significant operations there, investing in California-based businesses, or soliciting investments from California residents.
Each Covered Entity must use a standardized survey provided by DFPI to collect demographic data from each founding team member. Participation is voluntary; founders may opt out or decline specific questions. The data collection process is designed to protect founder anonymity.
By April 1 each year, Covered Entities must submit an anonymized demographic data report using a form available on the DFPI website. Reports will be made publicly accessible online. Companies are required to keep all records related to their reports for at least five years after submission.
If a Covered Entity fails to file its report by April 1, it will receive notice from DFPI and have 60 days to comply without penalty. After this grace period, penalties may reach up to $5,000 per day for non-compliance. Larger fines may apply for reckless or intentional violations.
This information is intended for general informational purposes only and does not constitute legal advice.