Starting on April 1, 2026, the first reporting deadline, companies that qualify as venture capital entities with a "nexus" to California — including firms headquartered in the state, investing in California startups, or raising capital from California investors — may be subject to new reporting requirements.
California's Department of Financial Protection and Innovation (DFPI) launched the Venture Capital Company (VCC) Reporting Program to improve transparency around venture capital investment in the state. The program is part of the Fair Investment Practices by Venture Capital Companies law, which requires certain venture capital firms with a connection to California to collect and report demographic information about the founding teams of companies they invest in. The goal is to better understand who is receiving venture capital funding and to provide policymakers and the public with reliable data on diversity within the startup ecosystem.
Beginning in 2026, covered venture capital companies must register with the DFPI and distribute a voluntary demographic survey to founding team members of companies they funded during the prior year. The survey gathers information such as race or ethnicity, gender identity, LGBTQ+ status, disability status, and veteran status. Founders may choose whether or not to participate, and any data collected is reported only in aggregated and anonymized form to protect individual privacy. These reports help create a clearer picture of venture capital investment patterns without revealing personal or company-specific details. Each year, covered firms must submit updated demographic reports to the DFPI, which will publish the aggregated data publicly. By making this information accessible, California aims to promote accountability, encourage more inclusive investment practices, and provide better insight into how venture capital shapes the state's innovation economy.
It turns out it is quite difficult to find respectable and secure platforms that give you a single link that multiple people can use to anonymously upload files, and also not be able to see files uploaded by anyone else. Our recommendation to firms needing to comply with this new requirement is to set up a Box Business account and use the anonymous File Request feature to create a link to a landing page that allows portfolio companies to submit the applicable reports anonymously. Contact us at support@hybridge.com to help you set up the process and accounts necessary to comply with this requirement.
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