For purposes of this chapter, the following

definitions apply: (a) “Commissioner” means the Commissioner of Financial Protection and Innovation. (b) “Covered entity” means a venture capital company that meets both of the following criteria:

(1) The venture capital company primarily engages in the business of investing in, or providing financing to, startup, early-stage, or emerging growth companies.

(2) The venture capital company meets any of the following criteria: (

A) The venture capital company is headquartered in California. (

B) The venture capital company has a significant presence or operational office in California. (

C) The venture capital company makes venture capital investments in businesses that are located in, or have significant operations in, California. (

D) The venture capital company solicits or receives investments from a person who is a resident of California. (c) “Department” means the Department of Financial Protection and Innovation. (d) “Diverse founding team member” means a founding team member who self-identifies as a woman, nonbinary, Black, African American, Hispanic, Latino-Latina, Asian, Pacific Islander, Native American, Native Hawaiian, Alaskan Native, disabled, veteran or disabled veteran, lesbian, gay, bisexual, transgender, or queer. (e) “Founding team member” means either of the following:

(1) A person who satisfies all of the following conditions: (

A) The person owned initial shares or similar ownership interests of the business. (

B) The person contributed to the concept of, research for, development of, or work performed by the business before initial shares were issued. (

C) The person was not a passive investor in the business.

(2) A person who has been designated as the chief executive officer or president. (f) “Primarily founded by diverse founding team members” means a founding team for which more than one-half of the founding team members responded to the survey described in paragraph (1) of subdivision (

c) of

Section and at least one-half of the founding team members are diverse founding team members. (g) “Venture capital company” has the same meaning as defined in paragraph (4) of subdivision (

a) of

Section 260.204.9 of Title of the California Code of Regulations. (h) “Venture capital investment” has the same meaning as defined in paragraph (5) of subdivision (

a) of

Section 260.204.9 of Title of the California Code of Regulations.