California’s Venture Capital Demographic Reporting Requirements: First Annual Report Due April 1, 2026

A new, first-of-its-kind California law now requires certain venture capital funds to report anonymized demographic data about the founding teams of their portfolio companies. The first annual report is due April 1, 2026, covering investments made during the 2025 calendar year. Fund managers should be aware of the key requirements and deadlines outlined below.

Overview

Under California’s Fair Investment Practices by Venture Capital Companies Law (the “FIPVCC”), certain venture capital funds with a connection to California (for purposes of this alert, “covered funds”) must (i) register with the California Department of Financial Protection and Innovation (the “DFPI”), (ii) provide a standardized demographic survey to the founding teams of their portfolio companies, and (iii) file an annual report containing the aggregated, anonymized demographic data by April 1 of each year.

Key Dates

• March 1, 2026: Beginning on this date, covered funds are required to register with the DFPI via the VCC Reporting Portal. To register, each covered fund shall provide its name, a designated point of contact (name, title, and email), and the fund’s email, phone number, physical address, and website.
• April 1, 2026: The first annual report is due, covering investments made during the 2025 calendar year.

Does This Law Apply to Your Fund?

This law applies at the individual fund or investment-entity level, not at the management company level, so each fund or investment entity must be assessed separately. A fund or investment entity is covered if it satisfies the following three criteria:

1. It is a “Venture Capital Company.” This means the fund either (i) has at least 50% of its assets in Venture Capital Investments or Derivative Investments (see definitions below) on at least one occasion during the annual period commencing with the date of its initial capitalization, and on at least one occasion during each annual period thereafter; (ii) is a “venture capital fund” under the Investment Advisers Act; or (iii) is classified as a “venture capital operating company” under ERISA.

• A “Venture Capital Investment” is an acquisition of securities in an operating company in which the investment manager, the fund, or its affiliates obtain “management rights,” which is the right to substantially participate in, substantially influence, or provide significant guidance and counsel concerning the management, operations, or business objectives of the operating company.
• A “Derivative Investment” is the acquisition of securities in exchange for an existing venture capital investment in the ordinary course of business, including upon the exercise of the existing venture capital investment, or in connection with a public offering, merger, or reorganization of the operating company to which the existing venture capital investment relates.

2. It is primarily investing in or providing financing to startup, early-stage, or emerging growth companies.
3. It has a California connection. This includes (i) being headquartered in California; (ii) maintaining a significant presence or operational office in California; (iii) making venture capital investments in businesses located in, or with significant operations in, California; or (iv) soliciting or receiving an investment from a California resident. Covered funds are determined at the individual fund or vehicle level. The analysis is fact-specific, but, as an example, an investment manager with an office in California likely has a California nexus sufficient to trigger reporting for all the covered funds it manages.

What Goes in the Annual Report?

The report covers all venture capital investments made in the prior calendar year and must include:

• Demographic Data. Aggregated and anonymized survey results from founding team members across categories such as gender identity, race, ethnicity, disability status, LGBTQ+ identification, veteran or disabled veteran status, California residency, and whether the person declined to respond, to the extent stated in the standardized survey. A “Founding Team Member” is (i) an early equity holder who contributed to the business before initial shares were issued and was not a passive investor, or (ii) the CEO or president.
• Diversity Investment Breakdown. The number and dollar amount of investments in companies “primarily founded by diverse founding team members,” expressed as a percentage of total investments and broken out by demographic category. A company qualifies as “primarily founded by diverse founding team members” only if more than half of its founding team members responded to the survey and at least half of the founding team members are “diverse founding team members” as defined in the statute.
• Portfolio Company Investment Data. The total amount of money that the covered fund invested in each portfolio company in which the covered fund made a venture capital investment, and the principal place of business of each such portfolio company, during the prior calendar year.

How Does the Survey Process Work?

Covered funds must provide each founding team member with the DFPI’s standardized survey form and a written disclosure. The disclosure must state that the survey is voluntary, that no negative consequences will follow from declining, and that aggregate data will be reported to the DFPI. The survey and disclosure may not be provided until after the covered fund has invested into the portfolio company, and neither the covered fund nor the DFPI may encourage, incentivize, or attempt to influence participation. The DFPI’s standardized survey form (VCC Demographic Data Survey) and reporting template (CA VCC Report) are linked and available on the DFPI’s VCC Reporting Program webpage. All records related to a covered fund’s annual report(s) must be retained for at least five years after the report is filed with the DFPI.

Fees and Penalties

There is a filing fee of at least $175 per report, which may be adjusted to cover the DFPI’s administrative costs.

As of now, if a covered fund fails to file the annual report by April 1, the DFPI will provide written notice and allow 60 calendar days to come into compliance without penalty. Following the cure period, the DFPI can impose fines of $5,000 per day of noncompliance and require reimbursement of its fees and expenses. For knowing or reckless violations, greater penalties can apply.

Where Does the Data Go?

The demographic information will be published on the DFPI website, where it will be publicly accessible, readily searchable, and downloadable.

Ongoing Considerations

The FIPVCC may face legal challenges. The law’s broad reach, including its application to out-of-state firms with minimal California nexus, raises questions about enforceability.

Recommended Next Steps

1. Determine which funds and investment vehicles are covered.
2. Review 2025 investments. Compile a list of all investments made by each covered fund in 2025 and assess which ones qualify as reportable venture capital investments.
3. Identify founding team members. For each venture capital investment, identify all founding team members and distribute the DFPI’s survey along with the required disclosures.
4. Compile internal data. Prepare the report containing the aggregated and anonymized survey data.
5. Register on the DFPI portal. Set up your account and designate a point of contact.
6. File the 2025 report by April 1, 2026. Complete and submit your annual report. All records related to the report must be retained for at least five years after filing.

Stay tuned. Mintz will continue closely monitoring developments in this area and will publish alerts as new guidance or updates become available.

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