BILL NUMBER: S5636
SPONSOR: HOYLMAN-SIGAL
 
TITLE OF BILL:
An act to amend the business corporation law, in relation to requiring
certain venture capital companies to report diversity information about
its funding determinations
 
PURPOSE OR GENERAL IDEA OF BILL:
To compel certain venture capital companies to disclose diversity infor-
mation about its funding determinations, provides for penalties, and
defines non-compliance.
 
SUMMARY OF PROVISIONS:
Section one of the bill provides the name of the bill.
Section two of the bill adds a new subdivision F to section 390 of the
general business law. Subdivision F defines terms and establishes penal-
ties and enforcement. It requires venture capital forms to report the
diversity data of the founders they invest in.
Section three provides the effective date.
 
JUSTIFICATION:
Venture capital firms are integral for entrepreneurs. Access to VC fund-
ing often makes the difference between success and failure for a start-
up, but VC funding tends to be unevenly distributed. Businesses founded
by women, people of color and LGBTQ+ individuals tend to receive dispro-
portionately less funding than businesses with non-diverse founders.
This bill would make public the demographic data of where venture capi-
tal firms invest. A similar bill has already been signed into law in
California, and New York would be the second state to require the publi-
cation of this information, aiming to increase diversity in investment
without mandating stringent or over-burdening regulations.
 
LEGISLATIVE HISTORY:
New bill.
 
FISCAL IMPLICATIONS:
None
 
EFFECTIVE DATE:
This act shall take effect immediately.