TLDR:
California proposes delaying the VC diversity reporting law to 2026 to give firms more time to prepare. The law aims to encourage more funding for female entrepreneurs in the venture capital sector.
Venture capitalists in California may have an extra year to comply with a new law requiring them to report on the diversity of the startups they fund. Governor Gavin Newsom’s administration proposed changes to delay the reporting deadline to 2026, giving firms more time to prepare.
The legislative language released on May 14 aims to address concerns that the law would cover a broader range of financial professionals beyond just venture capital firms. The original law, SB 54, was introduced to promote funding for female entrepreneurs in the venture capital sector because companies founded by women only received 2.1% of the capital invested in venture-backed startups.
By delaying the reporting requirement and narrowing the scope of the law, California hopes to encourage more diversity and inclusion in the venture capital industry. The proposed changes are part of the state budget and are subject to legislative approval.
