What Are the Penalties for Not Complying With the CA VCC Law?

One of the most common questions from VC operators is simple: what happens if we do not file on time under California's VCC reporting law?

Here is the practical answer based on the statute.

Missed deadline does not mean immediate fine

If a covered entity fails to file the required report by April 1, the DFPI must provide notice and a 60-calendar-day cure window to submit without penalty.

That means enforcement is not necessarily immediate on April 2. But once the cure window expires, the commissioner may pursue available remedies.

Potential penalty exposure after cure period

The statute allows for:

• Monetary penalties up to $5,000 per day for violations.
• Higher deterrence-focused penalties for reckless violations.
• Even higher deterrence-focused penalties for knowing violations.

In addition, enforcement can include:

• Orders to desist and refrain.
• Recovery of attorney's fees and investigative costs.
• Additional legal or administrative remedies authorized by law.

What influences penalty amounts

In determining penalties, the commissioner can consider factors such as:

• Financial standing of the covered entity.
• Assets under management.
• Nature of the failure to comply.
• Available financial resources.
• History of prior violations.

The commissioner may also compromise, modify, or remit penalties.

Other enforcement consequences

Beyond direct penalty amounts, firms can face:

• Investigative document requests.
• Administrative burden and legal costs.
• Internal distraction during fundraising and portfolio support cycles.

Compliance is usually far less expensive than remediation under enforcement pressure.

Practical risk management for firms

To reduce penalty risk:

• Build an annual filing workflow before Q1 deadline season.
• Keep required records organized and retention-ready.
• Use aggregate-only survey handling to reduce data risk.
• Assign one accountable filing owner.

Bottom line

The CA VCC law includes a notice-and-cure structure, but continued non-compliance can become costly quickly, including daily penalties and other enforcement actions. Treat filing readiness as an annual control, not a last-minute project.

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Informational only and not legal advice.

If you want a simpler path to annual readiness, visit the FIPVCC homepage.