Updated 3/23/2026: The California Department of Financial Protection and Innovation (DFPI) has announced that implementation and enforcement of the Fair Investment Practices by Venture Capital Companies Law (FIPVCC) is suspended until rulemaking is completed and final regulations are in place.

As a result, covered entities are not required to:

  • Submit new or updated FIPVCC registrations, or
  • File FIPVCC-related reports by the April 1, 2026 deadline.

These obligations will remain paused until the DFPI issues final regulations.

New requirements under the California Fair Investment Practices by Venture Capital Companies Law (Law) requires venture capital (VC) companies with a “nexus to California” to complete new registration and reporting with the California Department of Financial Protection and Innovation (DFPI). The law is broadly written and has significant reach, even to companies that do not have a physical presence in California.

The March 1, 2026 registration and April 1, 2026 reporting deadlines are quickly approaching, despite the fact that DFPI has not yet launched a registration portal. VC companies should prepare by determining whether they are covered under the new law and, if covered, should send out the DFPI surveys that are needed for reporting.

VC Companies Subject to the Law

The Law applies to the following “covered entities:

  • Venture capital companies, as defined under California Corporations Code section 27500;
  • That are primary engaged in the business of investing in, or providing financing to, startup, early-stage, or emerging growth companies;
  • That meets any of the following:
    • Are headquartered in California.
    • Have a significant presence or operational office in California.
    • Make venture capital investments in businesses that are located in, or have significant operations in, California.
    • Solicit or receive investments from a person who is a resident in California.

For more information on which companies are subject to reporting, see the DFPI guidance.

Registration & Reporting Requirements

  1. Registration

Beginning March 1, 2026, covered entities must register with DFPI and provide their name, contact information, and a designated point of contact. Covered entities are required to submit any changes to this information when filing annual reporting (discussed below).

DFPI is developing a registration platform, which will be made available prior to March 1st. As of this writing, the platform is not yet available. Companies can check this website for updates.

2. Collect Surveys & Report to the DFPI

By April 1, 2026, and annually thereafter, covered entities must report anonymized data from the voluntarily completed surveys to the DFPI. The reports will be posted on the DFPI website.

Provide & Collect Surveys:

Covered entities must provide the DFPI-developed survey to founding team members of each business the covered entity invested in during the prior calendar year. Along with the survey, a written disclosure must be provided stating the survey is voluntary, that no adverse action will be taken for not participating, and that aggregated data will be reported to DFPI.

Founding team members include:

  • • Individuals who have been designated as the CEO or the President; and
  • • Individuals who meet all the following criteria:
    • The individual owned initial shares or similar ownership interests of the business.
    • The individual contributed to the concept of, research for, development of, or work performed by the business before initial shares were issued.
    • The individual was not a passive investor in the business.

Aggregated & Report Data:

For the prior calendar year, covered entities will report:

  • From the completed surveys, aggregated demographic data on gender identity, race, ethnicity, disability status, identification of LGBTQ+, veteran status, and California residence of founding team members of all businesses invested in during the prior calendar year.
  • The percentage of venture capital investments made to businesses primarily founded by diverse founding team members.
  • The percentage of the total amount of venture capital investments made to businesses primarily founded by diverse founding team members.
  • The total amount in venture capital investments the covered entity invested in each business during the prior calendar year.
  • The principal place of business of each company in which the covered entity made a venture capital investment.

DFPI is developing the reporting process, which will be made available prior to April 1, 2026. As of this writing, the reporting process is still in development. Companies can check this website for updates.

Penalties

The DFPI has the power to investigate violations of the law and take action against covered entities that fail to meet their obligations or make an untrue statement in their reporting. Relief may include, but is not limited to, an order requiring the covered entity to refrain from the violation, costs for attorney fees and investigative expenses rendered, and monetary penalties (which can include $5,000 per day for which the violation or failure continues).

Next Steps

VC companies should first determine if they are a covered entity subject to the new California requirements.

Companies that are covered should:

  • Provide the DFPI survey to the founding members of businesses it invested in during the prior calendar year.
  • Monitor for updates to the registration portal and reporting process on the DFPI website.
  • Prepare to register with DFPI by March 1, 2026, and complete reporting by April 1, 2026. These deadlines no longer apply while implementation and enforcement is suspended until regulations are finalized.

Resources:

Connect with a Sequoia consultant to learn how Sequoia’s compliance services are integrated in our benefits services and tailored solutions. And if you’re already a Sequoia client, stay on top of your employer obligations with your Compliance Checklist that highlights important compliance dates, action items, and resources.

Last Updated:

Emerald Law

Emerald Law

Emerald is the Sequoia One Compliance Director for Sequoia, where she works with our clients to optimize and streamline benefits compliance. In her free time, Emerald enjoys stand-up comedy, live music, and writing non-fiction.