Key Takeaways
- • California's Fair Investment Practices by Venture Capital Companies Act (FIPVCC), enacted through SB 54 and amended by SB 164, mandates that covered VC firms report aggregated demographic data on founding teams of portfolio companies annually to the California Department of Financial Protection and Innovation (DFPI).
- • Registration deadline is March 1, 2026; covered entities must send demographic surveys to portfolio company founders by April 1, 2026, and submit aggregated results to DFPI by the same date, with annual filings required thereafter.
- • Demographic reporting covers gender identity, race, ethnicity, disability status, LGBTQ+ identification, and veteran status; survey participation by founders is voluntary, but VC firms face substantial fines for failure to file required reports.
- • Reporting occurs on a fund-by-fund basis, including SPVs, and must include total capital invested and a breakdown between diverse and non-diverse founding teams; DFPI recently released a standardized survey form and established a dedicated website for compliance updates.
Summary
California has implemented a first-of-its-kind mandatory diversity reporting regime for venture capital firms through the Fair Investment Practices by Venture Capital Companies Act (FIPVCC). The law, originally enacted as SB 54 and amended by SB 164, requires covered VC entities to collect and publicly disclose aggregated demographic information regarding the founding teams of portfolio companies they invested in during the preceding year. The stated objective is to increase transparency around diversity in venture funding allocation.
The California Department of Financial Protection and Innovation (DFPI) administers the FIPVCC and has established clear compliance milestones. Covered entities must register with DFPI by March 1, 2026. By April 1, 2026—and annually thereafter—firms must send standardized demographic surveys to founding team members of their portfolio companies and submit aggregated results to DFPI. The DFPI has issued a standardized survey form to facilitate consistent data collection across the industry. Notably, founder participation in the demographic survey is entirely voluntary, though VC firms remain obligated to file annual reports regardless of response rates.
Annual filings must be submitted on a fund-by-fund basis, including special purpose vehicles (SPVs), and must detail demographic characteristics of founding team members, total capital invested by the fund in relevant companies, and a breakdown of investments between diverse and non-diverse founding teams. Demographic categories tracked include gender identity, race, ethnicity, disability status, LGBTQ+ identification, and veteran status. Non-compliance carries significant penalties, and the DFPI has established a dedicated website with ongoing updates regarding FIPVCC implementation and requirements.
The California Department of Financial Protection and Innovation (DFPI) administers the FIPVCC and has established clear compliance milestones. Covered entities must register with DFPI by March 1, 2026. By April 1, 2026—and annually thereafter—firms must send standardized demographic surveys to founding team members of their portfolio companies and submit aggregated results to DFPI. The DFPI has issued a standardized survey form to facilitate consistent data collection across the industry. Notably, founder participation in the demographic survey is entirely voluntary, though VC firms remain obligated to file annual reports regardless of response rates.
Annual filings must be submitted on a fund-by-fund basis, including special purpose vehicles (SPVs), and must detail demographic characteristics of founding team members, total capital invested by the fund in relevant companies, and a breakdown of investments between diverse and non-diverse founding teams. Demographic categories tracked include gender identity, race, ethnicity, disability status, LGBTQ+ identification, and veteran status. Non-compliance carries significant penalties, and the DFPI has established a dedicated website with ongoing updates regarding FIPVCC implementation and requirements.
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