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VC panel urges California to use treasurer and pension tools to back emerging managers and diversify funding
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Summary
Venture capitalists and emerging‑manager representatives told a Senate committee that state policy can unlock capital for diverse founders by directing deposits, leverage, guarantees and reporting toward smaller funds that back underrepresented entrepreneurs.
Venture investors and managers told the Committee on Minority Economic Development that systemic features of the venture ecosystem—network-driven deal sourcing and concentrated asset management—leave Latino and other diverse founders underfunded. Panelists urged state actions that target ‘emerging managers’ (early‑stage funds under defined size thresholds) rather than demographic quotas to withstand legal and fiduciary constraints.
Miriam Rivera of Oulu Ventures highlighted that the majority of VC dollars are controlled by white male-led firms and argued early computer science and entrepreneurship education are part of the solution. Roman Leal (LEAP Global Partners) proposed concrete state tools: expand the treasurer’s time‑deposit preference for state‑chartered banks that invest equity in emerging managers; provide 2:1 nonrecourse debt or SBA‑style leverage through the I Bank; use SSBCI or similar funds to offer partial first‑loss guarantees that make pension investment in emerging managers feasible; and extend reporting mandates (SB 54) or a Rooney‑rule approach to university endowments to ensure emerging managers get interviews for allocations.
Panelists argued these approaches preserve fiduciary prudence while lowering the barriers that keep diverse managers and founders from scaling. The committee said it would compile recommendations and consider follow-up hearings with CalPERS, CalSTRS and the state treasurer’s office.
