8 minute read | February.10.2026
California venture diversity survey reporting requirements—originally enacted as SB 54 and now implemented via the Fair Investment Practices by Venture Capital Companies Act (FIPVCC), as amended by SB 164—creates a venture capital (VC) reporting regime covering many VC firms with a California nexus. FIPVCC requires “covered entities” (as described further below) to collect and publicly report aggregated demographic information regarding the founding teams of the portfolio companies in which they invested during the preceding year. The FIPVCC seeks to increase disclosure regarding diversity of founding teams receiving (VC) funding.
The California Department of Financial Protection and Innovation (DFPI) is responsible for overseeing the FIPVCC and recently issued a standardized survey for covered entities to use when collecting demographic data. Survey participation by portfolio company founders is entirely voluntary. DFPI also recently released a website with relevant updates regarding the FIPVCC.
Venture capital firms should note the following key compliance dates:
Firms subject to the FIPVCC must file an annual report on a fund-by-fund basis, including SPVs, detailing demographic information about certain founding team members of their portfolio companies in which a fund invested in the prior year, as well as total capital invested in such companies and a breakdown between diverse and non-diverse founding teams. Failure to file the required reporting could result in substantial fines.
The FIPVCC applies to “covered entities” that meet three criteria.
1. A covered entity must be a “venture capital company” under Section 260.204.9 of the California Code of Regulations. In short, this definition includes:
“Venture capital investment” means acquisition of securities in an operating company as to which the investment adviser, the entity advised by the investment adviser, or an affiliated person of either has or obtains management rights.
2. A covered entity must also be primarily engaged in the business of investing in, or providing financing to, startup, early-stage or emerging growth companies. “Emerging growth companies” are not defined in the VIPCC. The JOBS Act defines emerging growth companies as those that have annual gross revenues of less than $1.235 billion.
3. A covered entity will include any “venture capital company” that:
The FIPVCC is broad because it applies to “venture capital companies” located outside of California but which has at least one employee in California, solicits or receives capital from at least one California resident or makes an investment in any portfolio company with a California nexus. This is one reason why some believe this law is not enforceable with its reach to non-Californian companies.
Starting March 1, 2026, covered entities are required to register with DFPI by submitting the following information to DFPI:
Commencing April 1, 2026 and thereafter on an annual basis by April 1 of each year, covered entities must collect and submit the following information on an aggregated basis for the founding teams of the portfolio companies in which the covered entities made a venture capital investment in the prior calendar year (with the initial 2026 reporting based on 2025 data):
(a) The gender identity of each member of the founding team, including nonbinary and gender-fluid identities.
(b) The race of each member of the founding team.
(c) The ethnicity of each member of the founding team.
(d) The disability status of each member of the founding team.
(e) Whether any member of the founding team identifies as LGBTQ+.
(f) Whether any member of the founding team is a veteran or a disabled veteran.
(g) Whether any member of the founding team is a resident of California.
(h) Whether any member of the founding team declined to provide any of the information in (a) – (g).
In addition to:
The “founding team member” means either of the following:
A “Diverse founding team member” means a founding team member who self-identifies as a woman, nonbinary, Black, African American, Hispanic, Latino-Latina, Asian, Pacific Islander, Native American, Native Hawaiian, Alaskan Native, disabled, veteran or disabled veteran, lesbian, gay, bisexual, transgender, or queer.
“Primarily founded by diverse founding team members” means a founding team for which more than one-half of the founding team members responded to the survey and at least one-half of the founding team members are diverse founding team members.
DFPI must make submitted reports publicly accessible online and may publish aggregate results.
DFPI’s standardized survey must be submitted to each founding team member after the covered entity signs definitive investment documents for an investment in a startup and transfers capital to the startup. The data cannot be collected prior to the investment. Founders must be informed that participation is voluntary, that there will not be adverse actions for non-compliance and that survey responses will be anonymized and reported only in the aggregate.
DFPI is required to collect fees from covered entities to cover the costs of administering the program. The fees for each report will be at least $175, but DFPI may adjust the fee as necessary to meet the reasonable costs of administering the FIPVCC.
Covered entities are required to retain all records relating to reports for at least five years after they submit each report to DFPI. DFPI is entitled to examine the records of any covered entity to determine compliance with the FIPVCC, including requiring the covered entity to file additional written reports and/or provide answers to questions from DFPI.
DFPI will notify non-compliant firms and allow a 60-day cure period from the applicable annual April 1st filing deadline.
VC firms that fail to register and/or submit the information within the 60-day period may face significant monetary penalties.
In determining the amount of any penalty, the DFPI Commissioner (“the Commissioner”) shall take into account mitigating factors and the appropriateness of the penalty with respect to all of the following:
(a) The financial standing of the covered entity;
(b) The number of assets under management by the covered entity;
(c) The nature of the covered entity’s failure to comply with this chapter;
(d) The amount of financial resources available to the covered entity; and
(e) The covered entity’s history of previous violations.
The Commissioner may compromise, modify, or remit any penalty that may be ordered or that has already been ordered; however, the penalty shall not exceed $5,000 per day of non-compliance and/or non-payment. Penalties larger than $5,000 per day can be awarded if the covered entity has knowingly or recklessly violated the FIPVCC. DFPI may also seek reimbursement for reasonable attorneys’ fees and investigative expenses and is entitled to publish any information concerning violations of the FIPVCC by any covered entity.
To comply with the upcoming registration and reporting cutoff dates, venture capital firms should take the following proactive measures:
Some commentators continue to believe that the FIPVCC will be challenged in the courts as overreaching and unenforceable by imposing California law against covered entities that do not have any bona fide nexus to California. Notwithstanding, we recommend complying with the FIPVCC unless there is legal action stopping the enforcement of the law.