‘We have a bias problem’: California bill addresses race and gender in venture capital funding

Firms known for funding biased AI products would need to submit demographic information on founders

California would become the first state to require venture capital firms to disclose the race and gender of the founders of the companies they fund, under a bill currently awaiting Governor Gavin Newsom's signature.

The business community strongly opposes the legislation, characterizing it as an example of bureaucratic overreach. But civil rights groups and female entrepreneurs say it could go a long way toward equalizing opportunity in Silicon Valley, where startup capital overwhelmingly flows to white men. According to the business data firm PitchBook, companies founded by all-female teams accounted for just 2% of venture capital funding last year. Those led by Black women and Latinas received even less, 0.85%, according to a report from Project Diane, a research effort focused on female founders.