California Law Summary
Fair Investment Practices by Venture Capital Companies (FIP-VCC)
This page summarizes California Corporations Code sections 27500-27506 in plain language for compliance workflow context. It is not legal advice.
What the law requires
- Covered entities must provide the DFPI standardized demographic survey to each founding team member after the first transfer of funds under an executed investment agreement.
- Participation in the demographic survey is voluntary, and each question must include a decline-to-state option.
- Reports submitted to DFPI must use aggregated data and be anonymized to the extent possible.
- Covered entities must report investment-level data that includes each business name, amount invested, and principal place of business for the prior calendar year.
Key dates
- Effective date: June 29, 2024 (SB 164).
- Covered entities must submit designated contact information beginning March 1, 2026.
- First annual demographic report is due by April 1, 2026, for prior calendar year activity.
- Reporting continues annually each year by April 1.
Privacy and data handling in the law
- Survey collection and reporting must not associate responses with an individual founding team member.
- Neither a covered entity nor DFPI may encourage, incentivize, or influence a founder to participate in the survey.
- Records related to required reports must be preserved for at least five years.
Enforcement and penalties
- DFPI can issue notice and provide a 60-day cure period for missing updates or missing annual reports before penalties.
- DFPI may charge report administration fees (at least $175 per report, adjustable for administrative costs).
- Penalties can reach up to $5,000 per day for violations, with potentially higher deterrence penalties for reckless or knowing violations.