The California Department of Financial Protection and Innovation (“DFPI”) has opened the online portal for the Venture Capital Company (“VCC”) Reporting Program, allowing covered venture capital firms to register and submit required demographic reporting under California’s Fair Investment Practices by Venture Capital Companies Act (“FIPVCC”) in Corporations Code Section 27500 et seq.

Venture capital firms that meet the definition of a “venture capital company” with a nexus to California should take steps now to (i) register with the DFPI, and (ii) prepare and file their first Venture Capital Demographic Data Report (the “Report”) by April 1, 2026.

The first Report through the portal must cover investments made during the 2025 calendar year. Annual reporting will be required for each year thereafter.

More information and access to the DFPI portal can be found at: https://dfpi.ca.gov/regulated-industries/vcc-reporting-program/

Who Must Register?

The law applies to “Covered Entity” which generally means a venture capital company that has a nexus to the State of California.  To establish the nexus with California, the venture capital company needs to meet just one of the following criteria:

• The venture capital company is headquartered in California;
• Has a significant presence or operational office in California;
• Makes venture capital investments in businesses that are located in, or have significant operations in, California; OR
• Solicits or receives investments from a person who is a resident of California.

This rule and definition are broad and as a result, even a firm located entirely outside the State of California can still qualify as a Covered Entity if they have an investor who is a California resident, or even if one investment has a significant presence in California.

When registering through the DFPI portal, the firm must provide its basic identifying information as well as the name and contact information for the designated firm contact responsible for managing compliance with the reporting requirements.  The DFPI has published a User Guide to assist with this process.

What Must be Reported?

Covered Entities must collect key data points from the “founding team member(s)” of each of the portfolio companies that received venture investment during the reporting year. The founding team members includes a person who has been either designated as Chief Executive Officer or President, or i) owned initial shares (or similar ownership interests) of the business, (ii) contributed to the concept, research for, development of or work performed by the business before the initial shares were issued, and (iii) was not a passive investor in the business.

The data to be collected from each of the identified founding team member(s) includes their gender identity, race and ethnicity, disability status, veteran status and LGBTQ+ status.  This information is then aggregated by the firm and included in the Report. To facilitate this process, the DFPI has developed this Venture Capital Demographic Data Survey (“Survey”) that can be distributed to the founders. The founding members do have the option to decline to provide a response for each category.

While the results of the Survey are aggregated and anonymized, the Report itself will be made publicly available. Members of the public will be able to access and view reports filed by specific venture capital companies.

Enforcement

Unfortunately, failure to comply with the registration and reporting requirements may result in administrative enforcement action under its authority including but not limited to, administrative orders, investigations or requests for information and penalties.

Given the short time frame between the opening of the DFPI portal and the upcoming reporting deadlines, affected firms should begin distributing and collecting the Survey from applicable founding team members and compiling the required information for the 2025 reporting year. Firms that may qualify as Covered Entities should also review their investment activities and investor base to confirm whether a California nexus exists and ensure that appropriate internal processes are in place to comply with the registration and reporting requirements.

Because the Report will be publicly available, firms should carefully review their submissions prior to filing and consider coordinating internally with compliance and investor relations personnel. Consultation with outside counsel is advisable.