Registration and Reporting Requirements Suspended as California’s New FIPVCC Law Takes a Pause

On March 17, 2026, the California Department of Financial Protection and Innovation (DFPI) suspended the implementation and enforcement of the Fair Investment Practices by Venture Capital Companies Law (FIPVCC) until formal rulemaking is completed and final regulations are adopted. Due to this suspension, “covered” venture capital companies will not be required to register with the DFPI, submit reports, or pay filing fees by the original April 1, 2026 deadline.

Covered entities that may be subject to the requirements under the FIPVCC, as originally enacted, should still be aware of general obligations to ensure ready compliance once formal rulemaking is completed and final regulations are in place. A summary of the FIPVCC and the related registration and reporting requirements as currently enacted can be found below.

Startups, Early-Stage and Emerging Companies: Please also take note of the FIPVCC reporting requirements, as this may become an annual process undertaken by certain of your investors.

Manatt will continue to monitor updates from the DFPI regarding any further developments on the FIPVCC. For further guidance, please contact the Manatt professional with whom you work, or reach out to any of the authors listed here.

Background on the FIPVCC

Signed by Governor Newsom on October 8, 2023 and last amended on June 29, 2024, the FIPVCC demands transparency by requiring venture capital companies with a nexus to California to register with the DFPI and submit certain demographic data about companies in which the covered entities invested.

1. Who Must Register and How to Register

Covered venture capital companies must register with the DFPI.

What is a covered venture capital company?

A covered venture capital company (VCC) is:

• An entity whose primary business is investing in, or providing financing to, startup, early-stage, or emerging growth companies; and
• An entity that has a nexus to California

The California nexus requirement is broad and can be satisfied through operations, investments or investor relationships in California. Specifically, under the FIPVCC, a venture capital company will be deemed as having a nexus to California if it:

• is headquartered in California;
• has a significant presence or operational office in California;
• invests in businesses that are located in, or have significant operations in, California; or
• solicits or receives investments from California residents.

How to register with the DFPI

If a venture capital company is required to register with the DFPI, the VCC must set up a user account for the Venture Capital Company Portal (VCC Portal) on the DFPI website. The VCC then must register within the VCC Portal.

2. How to Conduct the Survey & Collect Demographic Information

Each year, VCCs must distribute the DFPI’s standardized to the founding team members of any business that received an investment from such VCCs in the prior calendar year. The survey captures basic demographic data about each founding team member of any such business.

When sending the survey, VCCs must provide to each founding team member a written disclosure that states that:

• The founding team member’s participation in the survey is voluntary;
• There will be no adverse action taken against the founding team member if he or she decides to not participate in the survey; and
• The data collected will be reported to the DFPI.

VCCs must ensure that their collection of survey response data and subsequent reporting of such data to the DFPI is anonymized.

3. What is in the Report

A VCC must annually aggregate collected demographic data and submit the information in the DFPI’s to the DFPI via the VCC Portal. The report also requires submission of the following, based on the prior calendar year:

• The number of venture capital investments made by the VCC to businesses “primarily founded by diverse founding team members” as a percentage of the total number of venture capital investments;
• The dollar amount of venture capital investments made by the VCC to businesses primarily founded by diverse founding team members as a percentage of the total dollar amount of venture capital investments;
• The number of venture capital investments made by the VCC to businesses primarily founded by diverse founding team members for each demographic category as a percentage of the total number of venture capital investments;
• The dollar amount of venture capital investments made by the VCC to businesses primarily founded by diverse founding team members for each demographic category as a percentage of the total dollar amount of venture capital investments; and
• The total amount of money in venture capital investments and the principal place of business of each business that received investments from the VCC;

Filing fees are currently set at $175 per report. After submission, the report will be publicly available on the DFPI website.

4. Consequences of Failing to Report and Follow-Up Steps

If a VCC fails to file a report, the DFPI will notify the VCC that it has sixty (60) days from the date of notification to submit the report without penalties. If the failure to file persists after the sixty (60) day grace period, the DFPI may impose penalties up to $5,000 for each day that the VCC does not submit the report and even higher penalties for knowing violations. A VCC must also be sure to update its information in the VCC Portal annually, subject to the foregoing timing and enforcement framework.

Compliance Checklist

If you are a venture capital company, subject to the DFPI’s completion of rulemaking and final regulations, the below summarizes your obligations to stay in compliance with the FIPVCC as currently enacted:

1. Determine if you are a VCC under the FIPVCC.
2. Register with the DFPI through the VCC Portal.
3. Download the DFPI’s Venture Capital Demographic Data Survey and distribute such survey to each founding member of each business you invested in.
4. Input the collected anonymized demographic data into the DFPI’s Venture Capital Demographic Data Report and submit such report through the VCC Portal.

As stated above, implementation and enforcement of the FIPVCC have been suspended pending completion of rulemaking and until final regulations are in place. The DFPI has indicated that it intends to seek input from venture capital companies, industry associations, founders, investors, and other relevant parties over the next few months. 

If you would like to provide the DFPI with input or participate in the rulemaking process, please contact the Manatt professional with whom you work, or reach out to any of the authors listed here. In the meantime, Manatt will continue to monitor updates from the DFPI regarding any further developments on the FIPVCC.

If more than half of the founding team members of a business responded to the survey and at least half of the responding founding team members are diverse founding team members, that business is deemed “primarily founded by diverse founding team members.” A “diverse founding team member” is one who self-identifies as a woman, nonbinary, Black, African American, Hispanic, Latino/Latina, Asian, Pacific Islander, Native American, Native Hawaiian, Alaskan Native, disabled, veteran or disabled veteran, lesbian, gay, bisexual, transgender, or queer.”