The law would apply to venture capital firms based in California, as well as those that invest in the state or solicit funds from residents, potentially impacting firms from Silicon Valley to Wall Street. The legislation comes amid a national backlash against government efforts to promote diversity. The proposed California law does not include any preferences for women or people of color. Governor Newsom has until October 14 to sign or veto the bill.
Key takeaways:
- California is considering a bill that would require venture capital firms to disclose the race and gender of the founders they fund, a first in the United States.
- The bill has faced opposition from the business community, but has been supported by civil rights groups and female entrepreneurs who believe it could help equalize opportunity in Silicon Valley.
- If signed into law, venture firms would have until 1 March 2025 to provide demographic data to the California civil rights department, and could face penalties for non-compliance.
- The data collected could potentially be used in future lawsuits by female entrepreneurs and business owners of color who believe they have been discriminated against.