Venture Capital, Gender, and Deregulation in IT Startup Performance

Venture capital (VC) plays a key role in enabling information technology (IT) startups, driving economic growth and innovation. However, two defining features in the IT industry—deregulated market dynamics and gender-imbalanced labor structures—change VC effectiveness. The male-dominated ecosystem channels resources toward male entrepreneurs, leaving female-led IT startups less resourced and, in theory, more likely to benefit from VC support. Yet, they face challenges converting VC into internal capacity, such as hiring in male-dominated markets—a dynamic we term VC utilization bias. Deregulation further complicates this relationship: while it can enhance resource flexibility, it also intensifies competition, amplifying disparities. Using multiple datasets and the Telecommunications Act of 1996 as an exogenous shock, we document VC utilization bias and show that deregulation magnifies it. This work contributes to the information systems (IS) literature by examining gender bias at the executive level in the IT industry and how VC support amplifies gender disparity among IT entrepreneurs.