What Is FIPVCC? California's Fair Investment Practices by Venture Capital Companies Law Explained
FIPVCC stands for the Fair Investment Practices by Venture Capital Companies law. It is a California statute codified at Corporations Code section 27500 et seq. that requires certain venture capital companies to collect voluntary demographic data from the founding team members of companies they invest in, and to report that data annually to the California Department of Financial Protection and Innovation (DFPI).
Legislative Background
The Fair Investment Practices by Venture Capital Companies law was enacted by the California Legislature to promote transparency and accountability in venture capital investing. The law recognizes that venture capital funding plays a significant role in shaping California's economy and innovation ecosystem, and that disparities in access to VC funding have persisted across demographic groups.
By requiring demographic data collection and reporting, FIPVCC aims to provide policymakers, the public, and the venture capital industry itself with reliable data on the diversity of founding teams receiving venture capital investment in California. The data is anonymized and aggregated before being made publicly available, protecting individual privacy while enabling meaningful analysis.
Full Legal Citation
The law is formally titled the Fair Investment Practices by Venture Capital Companies and is located at California Corporations Code sections 27500 through 27507. The acronym "FIPVCC" is commonly used to refer to this law. The program is administered by the California Department of Financial Protection and Innovation (DFPI) through its VCC Reporting Program.
Who Is Covered?
FIPVCC applies to covered venture capital companies — entities that meet the statutory definition of a "venture capital company" under Corp. Code section 27500 and have a California nexus. A California nexus may exist if the firm:
- Is headquartered in California
- Has offices or operations in California
- Makes investments in California-based companies
- Otherwise has a significant connection to the state
Out-of-state firms that invest in California-based companies may be covered. If you are unsure, consult legal counsel or contact the DFPI directly at VCC_Support@dfpi.ca.gov.
What Does FIPVCC Require?
FIPVCC requires covered venture capital companies to:
- Offer a voluntary demographic survey to the founding team members of each company they invest in. The survey must cover race/ethnicity, gender identity, sexual orientation (LGBTQ+ status), disability status, and veteran status.
- Collect and securely store the demographic data received from founding team members who choose to participate. Participation is entirely voluntary.
- Submit an annual Venture Capital Demographic Data Report to the DFPI by April 1 each year. The report must contain aggregated and anonymized demographic data — individual survey responses are never disclosed.
- Maintain records related to compliance, including survey distribution, responses, and report submissions.
Key Definitions
- Venture Capital Company
- As defined by Corp. Code section 27500, an entity primarily engaged in providing capital to startup and early-stage companies.
- Founding Team Member
- An individual who is a founder, co-founder, or member of the executive leadership team of a company receiving venture capital investment.
- Primarily Founded by Diverse Founding Team Members
- Under Corp. Code § 27500(d), a company is "primarily founded by diverse founding team members" if it has a sufficient response rate and at least 50% of respondents identify as members of an underrepresented group.
The Role of the DFPI
The California Department of Financial Protection and Innovation (DFPI) is the state agency responsible for administering the FIPVCC program. The DFPI:
- Receives annual Venture Capital Demographic Data Reports from covered firms
- Makes aggregated reports publicly available on its website
- Provides guidance and support to covered entities through its VCC Reporting Program
- Has enforcement authority for non-compliance
The official DFPI VCC Reporting Program page is available at dfpi.ca.gov/regulated-industries/vcc-reporting-program.
Key Dates and Timeline
- March 1, 2026 — FIPVCC takes effect. Covered venture capital companies must begin offering demographic surveys to founding team members.
- April 1, 2026 — First annual Venture Capital Demographic Data Report due to the DFPI, covering investment activity from the prior calendar year.
- April 1 each subsequent year — Annual report due date.
How FairVC Helps with FIPVCC Compliance
FairVC is a purpose-built compliance platform that automates the entire FIPVCC workflow:
- Portfolio management — Track all portfolio companies and founding team members in one place.
- Automated survey distribution — Send demographic surveys to founders with one click. Track delivery, opens, and completions.
- AES-256-GCM encryption — All demographic responses are encrypted at rest using military-grade encryption.
- DFPI report generation — Generate a PDF report matching the official DFPI template, ready for submission.
- 5-year data retention — Securely retain records for compliance with audit requirements.
Get started with FairVC for free or read our step-by-step compliance guide.