Key Highlights From California’s New Diversity Reporting Law

On October 8, 2023, California Governor Gavin Newsom signed into law Senate Bill 54 (the “Diversity Reporting Law”). The Diversity Reporting Law is intentionally broad in its scope and is intended to help highlight and address the lack of funding for companies owned by diverse owners, in particular minorities and woman.

At a high level, commencing on March 1, 2025, the Diversity Reporting Law requires certain entities with a California nexus to file an annual report detailing certain demographic data about the founding team members of the businesses in which such entities made a venture capital investment in the prior calendar year as well as the total amount of money invested in such businesses and a break down between diverse and non-diverse businesses and founding teams.

The collected data will be publicly available on the California Civil Rights Department website.

Read the full client alert.