(Cooley)
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California’s governor recently signed into law SB 54, a bill intended to increase transparency regarding diversity of founding teams in the venture capital (VC) industry. The new law will require VC companies, including “venture capital funds” (as defined in the Investment Advisers Act of 1940), with a nexus to California to report to the California Civil Rights Department (CRD) on the diversity of the founding members of companies in which they invest.
SB 54 will require “covered entities” to collect and maintain diversity data about the founding teams of their portfolio companies and report such information to the CRD on an annual basis. While the bill includes March 1, 2025, as the first reporting date, we expect this may get pushed back due to some comments from Gov. Gavin Newsom and possible litigation challenges, as discussed below.
Read more here.