California’s VC Diversity Reporting Law
California began rolling out a first-of-its-kind reporting program that will change how many venture and private investment fund managers collect information about the founders they back. In 2026, fund managers with a “California nexus” must survey founders and submit annual aggregated reports with the California Department of Financial Protection and Innovation (DFPI).
DFPI recently launched the VCC Reporting Program’s website, which includes the official demographic survey and guidance on entities that must register and submit reports. If you’re a founder planning to raise money, even if your company isn’t based in California, compliance checks are a new consideration you should keep in mind.
We summarize key points below for convenience, but we recommend you and your counsel consult and review the VCC Reporting Program’s website for official guidance and the most current information.
Who Does This Affect?
Founders are most likely to encounter SB 54 during investor processes. After an investment closes, a covered fund manager may ask members of the founding team to complete DFPI’s Capital Demographic Data Survey. These requests may occur even if the company is not headquartered in California.
Who Is covered?
The law is drafted broadly and applies to “covered entities” that:
What Information May Founders Be Asked to Provide?
Covered managers must distribute a DFPI’s standardized survey after an investment is finalized and funded. Founder participation is voluntary, and responses are anonymized and reported only in the aggregate.
The survey fields include:
High-Level Overview: What Must Covered Fund Managers Do?
What Are the Key Dates and How Will It Be Enforced?
Start tracking now: The first report covers investments made in 2025. Surveys should be sent out to founders.
DFPI has indicated a post-deadline grace period of around 60 days after notice before penalties of up to $5,000 per day may apply. Any changes to these dates will likely be posted on DFPI’s Venture Capital Company Reporting Program homepage.
Why Is This Important for Founders?
Founders should expect a new post-close workflow, as a demographic survey request may arrive shortly after funding.
It will be critical to decide internally how you will handle participation (company guidance vs. individual choice) because responses are voluntary. It’s also important to treat requests as privacy-sensitive. Be sure to route responses through a clear owner (often the CEO or legal counsel) and confirm secure handling of sensitive and private information.
Founder Checklist
DFPI recently launched the VCC Reporting Program’s website, which includes the official demographic survey and guidance on entities that must register and submit reports. If you’re a founder planning to raise money, even if your company isn’t based in California, compliance checks are a new consideration you should keep in mind.
We summarize key points below for convenience, but we recommend you and your counsel consult and review the VCC Reporting Program’s website for official guidance and the most current information.
Who Does This Affect?
Founders are most likely to encounter SB 54 during investor processes. After an investment closes, a covered fund manager may ask members of the founding team to complete DFPI’s Capital Demographic Data Survey. These requests may occur even if the company is not headquartered in California.
Who Is covered?
The law is drafted broadly and applies to “covered entities” that:
- Qualify as a “venture capital company” under California law and are primarily engaged in investing in startup, early-stage or emerging-growth companies; and
- Have a California nexus, such as having its headquarters in and/or operating in California, investing in California-based portfolio companies, or soliciting/receiving investments from California residents or entities, even if there is only one California-based investor.
What Information May Founders Be Asked to Provide?
Covered managers must distribute a DFPI’s standardized survey after an investment is finalized and funded. Founder participation is voluntary, and responses are anonymized and reported only in the aggregate.
The survey fields include:
- Gender identity (including nonbinary, gender fluid options and a “decline to state” option)
- Race and ethnicity
- LGBTQ+ status
- Disability status
- Veteran or disabled-veteran status
- California residency status
- A “decline to state for all responses” option
High-Level Overview: What Must Covered Fund Managers Do?
- Register with DFPI and provide basic entity information and a compliance contact. Registration will be available through the VCC Registration Portal, which is expected to come soon.
- Collect founder survey responses and file annual aggregated results, including confirming if no founders responded.
- Use DFPI’s published VCC Report template to submit the aggregated results (and the standardized DFPI survey/guidance for data collection).
- Report investment-level details such as total dollars invested in each business during the prior year, each company’s principal place of business, and the covered entity’s percentage of venture capital investments.
- Retain records related to each report for at least five years.
What Are the Key Dates and How Will It Be Enforced?
Start tracking now: The first report covers investments made in 2025. Surveys should be sent out to founders.
- March 1, 2026: Covered managers must register with DFPI.
- April 1, 2026: The first annual report is due (covering 2025 investments).
DFPI has indicated a post-deadline grace period of around 60 days after notice before penalties of up to $5,000 per day may apply. Any changes to these dates will likely be posted on DFPI’s Venture Capital Company Reporting Program homepage.
Why Is This Important for Founders?
Founders should expect a new post-close workflow, as a demographic survey request may arrive shortly after funding.
It will be critical to decide internally how you will handle participation (company guidance vs. individual choice) because responses are voluntary. It’s also important to treat requests as privacy-sensitive. Be sure to route responses through a clear owner (often the CEO or legal counsel) and confirm secure handling of sensitive and private information.
Founder Checklist
- Add the survey to your closing/post-close checklist.
- Align on who counts as a “founding team member” for your company as it will help ensure you know who must complete DFPI’s Capital Demographic Data Survey.
- Keep a record of which investors request the survey and when, so you can respond consistently across rounds.