California · Wired
California Pauses Enforcement of Law Requiring VCs to Report Diversity Data
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Under a new state regulation, venture capital firms operating in California were supposed to submit demographic data about their portfolio companies, including the gender and race of startup founders they backed.
Key facts
- Lawmakers amended the law in 2024 to delay reporting until April 1, 2026, and enable the state to levy daily fines for noncompliance
- California lawmakers first passed the measure in 2023, and it was signed into law shortly thereafter by Governor Gavin Newsom
- The California Department of Financial Protection and Innovation (DFPI) has announced that it plans to initiate rulemaking in response to comments by various stakeholders relating to the Fair
- The latest California malarky is a requirement for venture investors to collect/report racial and gender statistics,” wrote Blake Scholl, the founder and CEO of venture-backed aviation startup Boom
Summary
“The California Department of Financial Protection and Innovation (DFPI) has announced that it plans to initiate rulemaking in response to comments by various stakeholders relating to the Fair Investment Practices by Venture Capital Companies Law,” the state agency posted on its website in mid-March. California lawmakers first passed the measure in 2023, and it was signed into law shortly thereafter by Governor Gavin Newsom. The law called for venture capital and some other investment firms to file annual reports starting March 1 of last year about the overall makeup of the founding teams they had invested in and the amount of money they provided to diverse founders.