California's Venture Capital Diversity Reporting Requirements Take Effect(wsgr.com)
wsgr.com
California's Venture Capital Diversity Reporting Requirements Take Effect
https://www.wsgr.com/en/insights/californias-venture-capital-diversity-reporting-requirements-take-effect.html
8 comments
this.
it’s genuinely shocking how much time is spent coming up with ideas like this, implementing them and making everyone report on it - for no outcome whatsoever
it’s genuinely shocking how much time is spent coming up with ideas like this, implementing them and making everyone report on it - for no outcome whatsoever
I answered this already for one of our investors - marked the single "decline to disclose" box and sent it back.
> The demographic information collected under the FIPVCC includes gender identity, race, ethnicity, disability status, LGBTQ+ status, California residency, and veteran status. The demographic data will be reported to the California Civil Rights Department, and each report will also be made publicly available on the DFPI’s website.
This is very concerning. I don’t care that it’s anonymous. At some point this data will be breached, correlated with other data, and lead to significant and invasive privacy issues. California remains obsessed with identity politics even though it went out of style 5 years ago.
There is this mitigation:
> Founders should be aware that completion of VCC Surveys is strictly voluntary and there is no legal requirement to provide the requested information or respond in any way. Covered Entities are required by the law to provide the demographic survey to their portfolio company founders, but are prohibited from encouraging, incentivizing, or attempting to influence the decision of a founding team member to participate.
But I wouldn’t be surprised if they one day make it mandatory instead of voluntary.
I am also curious how California can enforce these criteria for being covered by this requirement:
> the venture capital company makes venture capital investments in businesses that are located in, or have significant operations in, California; or > the venture capital company solicits or receives investments from a person who is a resident of California
If a VC company from a different state invests in a business that has operations in California, they need to file? I don’t see how this could be legal or constitutional (commerce clause).
And of course, California taxpayer are funding the jobs of all the people involved in running this useless program.
This is very concerning. I don’t care that it’s anonymous. At some point this data will be breached, correlated with other data, and lead to significant and invasive privacy issues. California remains obsessed with identity politics even though it went out of style 5 years ago.
There is this mitigation:
> Founders should be aware that completion of VCC Surveys is strictly voluntary and there is no legal requirement to provide the requested information or respond in any way. Covered Entities are required by the law to provide the demographic survey to their portfolio company founders, but are prohibited from encouraging, incentivizing, or attempting to influence the decision of a founding team member to participate.
But I wouldn’t be surprised if they one day make it mandatory instead of voluntary.
I am also curious how California can enforce these criteria for being covered by this requirement:
> the venture capital company makes venture capital investments in businesses that are located in, or have significant operations in, California; or > the venture capital company solicits or receives investments from a person who is a resident of California
If a VC company from a different state invests in a business that has operations in California, they need to file? I don’t see how this could be legal or constitutional (commerce clause).
And of course, California taxpayer are funding the jobs of all the people involved in running this useless program.
> At some point this data will be breached
Yeah, not a fan of any state making records of where their religious and sexual minorities live.
Yeah, not a fan of any state making records of where their religious and sexual minorities live.
Maybe I have poor reading comprehension, and my google-fu is bad, but I can't find anything that says specifically why this is necessary, or what it hopes to achieve. I found a single "increase transparency". Why is a transparency to protected classes a good thing? I thought they were protected because they're supposed to, fundamentally, not matter/influence decisions.
It's not necessary. As with much of politics it's purely performative, intended to drive votes by a certain segment of the party base.
So the data will be unusable because of response bias.