As the wrapped up earlier this month, Newsom approved a measure that will force venture capital firms operating in California to collect and disclose demographic data about the founders of the companies they invest in 鈥� while on the very same day, he vetoed for the third time a similar transparency requirement for his own gubernatorial appointments.
by state Sen. , a Berkeley Democrat, was among nearly 900 measures that this year. It represents an effort to boost lagging venture capital investments in businesses founded by , and entrepreneurs.
Under the law, venture capital firms must annually survey the founding teams of the companies they invested in during the year for information such as gender identity, race, ethnicity and disability status, as well as whether they are LGBTQ+, military veterans or California residents. Aggregated data, along with how much money was invested in those businesses, will be reported to the state starting March 1, 2025.
The National Venture Capital Association , arguing it would 鈥減roduce misleading and counterproductive data that would hurt the cause of diversity鈥� because founders from diverse backgrounds would be more likely to participate in the voluntary surveys, exaggerating their representation in startup investments.
Newsom identified his own issues with 鈥減roblematic provisions,鈥� 鈥渦nrealistic timelines鈥� and the cost to the state of administering the program 鈥� some of which he promised to address in cleanup language in the next budget 鈥� but ultimately signed the measure.
- Newsom, in his : 鈥淭his bill resonates deeply with my commitment to advance equity and provide for greater economic empowerment of historically underrepresented communities.鈥�
The governor looked less favorably on by Sen. , a Santa Barbara Democrat who has spent the past three years trying to pass a law documenting the diversity of gubernatorial appointments. Newsom again rejected her latest effort, which would have required the governor鈥檚 office, starting in 2026, to annually publish aggregate demographic information of appointees to state boards and commissions in the previous year, including their ethnicity, gender, disability status, region, party affiliation and veteran status.
In his , Newsom noted that the data would be voluntarily self-reported and argued that it would therefore 鈥渘ot necessarily accurately reflect the diversity of appointees.鈥� Lim贸n expressed frustration in a statement to CalMatters that her proposal was in line with the goals and data collection methods of the venture capital firm reporting mandate that Newsom signed.
- Lim贸n: 鈥淲e believe that this Administration has taken strides to diversify our statewide appointees, but more needs to be done to ensure we have mechanisms in place long after this Administration is gone.鈥�
The governor鈥檚 office did not respond to repeated questions from CalMatters about why Newsom supported a diversity reporting requirement for venture capital firms but not for himself, why he signed that bill in spite of the concerns he identified, and why he thought that self-reported data was only a problem for the gubernatorial appointments proposal.
- Newsom spokesperson Omar Rodriguez, in an email: 鈥淭hanks for reaching out. The messages for SB 54 and SB 702 speak for themselves here. Will let you know if we have anything further to add.鈥�
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