Establishes the diversity in investment act requiring certain venture capital companies to report diversity information about its funding determinations; requires reports to be published on the venture capital companies' websites; establishes penalties for failure to complete and publish such reports.
This bill, titled the “diversity in investment act,” would add a new section to the New York Business Corporation Law requiring certain venture capital companies to collect and report demographic information about the founding teams of businesses they fund. The reporting would begin in 2028 and would cover the prior calendar year’s investments, including aggregated data on gender identity, race, ethnicity, disability status, LGBTQ+ status, veteran status, New York residency, and whether founders declined to answer. It also requires reporting on the share and dollar amount of investments made in businesses primarily founded by diverse founding team members, as well as the principal place of business for each portfolio company.
The bill defines which venture capital companies are covered, focusing on firms that primarily invest in startups, early-stage, or emerging growth companies, or manage assets for third-party investors, and that have a New York connection through headquarters, office presence, investments, or fundraising from New York residents. It also requires firms to survey founding team members after an investment is made, include a “decline to state” option, and provide disclosures stating participation is voluntary and that no adverse action may be taken for nonparticipation. The collected data must be anonymized and made publicly available on the firm’s website and submitted to the Secretary of State for publication in searchable form.
The bill would create a new compliance and enforcement framework under state law. The Attorney General would be authorized to seek injunctions and civil penalties for violations, with daily fines scaled to the firm’s asset size. The measure also allows the Attorney General to investigate, take proof, and issue subpoenas. In practical terms, the bill would impose new disclosure, recordkeeping, and public-reporting obligations on venture capital firms operating in or connected to New York, while also creating a public dataset on investment patterns and founder demographics.
The overall sentiment reflected in the available materials is limited but appears policy-driven and affirmative in purpose, with the bill framed as a transparency and diversity initiative. Because there are no committee transcripts or recorded votes provided, there is no direct evidence of support or opposition from legislators in the available record. The bill’s structure suggests an emphasis on accountability and public disclosure rather than direct regulation of investment decisions.
The main points of contention likely concern privacy, administrative burden, and whether the reporting requirements could influence investment behavior or founder interactions. The bill attempts to address some of those concerns by making participation voluntary, requiring anonymized reporting, and prohibiting firms from encouraging or discouraging survey responses. Even so, venture capital firms may view the reporting and publication mandates, along with potential penalties, as burdensome, while supporters would likely see them as necessary to measure and improve diversity in access to capital.
The bill would amend the Business Corporation Law by adding a new section governing “diversity in investment practices by venture capital companies.” It would require covered venture capital firms with New York ties to collect, retain, report, and publicly post demographic and investment data, and to submit annual reports to the Secretary of State for public access. It also authorizes Attorney General enforcement through injunctions, subpoenas, restitution, and daily civil penalties tied to firm asset size, thereby creating new compliance obligations and enforcement exposure for venture capital firms and their advisers.
No committee transcript or vote record is provided, so there is no documented floor or committee sentiment to summarize. Based on the bill text and caption, the measure is presented as a transparency and diversity initiative aimed at improving visibility into venture capital funding patterns. The available context suggests a generally supportive policy rationale, but there is no direct evidence of legislative support, opposition, or amendments in the materials provided.
The likely areas of contention are the scope of the reporting mandate, the privacy implications of collecting founder demographic data, and the administrative burden on venture capital firms. Critics may object that the bill could pressure founders to disclose sensitive information or create compliance costs and litigation risk, while supporters would argue that the survey is voluntary, includes a decline-to-state option, and requires anonymized reporting to protect individuals. Another possible dispute is whether public disclosure of investment patterns meaningfully advances equity goals or instead risks chilling investment decisions.