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The venture capital industry is an important provider of capital to start-ups and has grown considerably in recent decades. This study explores how investors' gender perceptions influence venture capital investment decisions in an industry that remains highly gender imbalanced, both amongst the venture capital decision-makers and with respect to the allocation of capital to entrepreneurs.

The authors' approach was informed by a thorough literature review and in-depth qualitative interviews with ten decision-makers at some of the foremost venture capital funds in Norway. Interviews were recorded, transcribed and coded using NVivo.

The authors' findings demonstrate that the Norwegian venture capital industry is influenced by homophily and role congruity. The authors highlight the challenges entrepreneurs face in gaining access to venture capital if they are not already members of the investors' network, a situation that results in a recycling effect that helps maintain the industry’s gender imbalance. Moreover, it appears that venture capitalists (VCs) favour masculine characteristics when assessing entrepreneurs, revealing a potential incongruence between female characteristics and perceived entrepreneurial attributes.

The authors' study contributes to and extends the extant literature on homophily and role congruity. Indeed, through investigating the gender-based perceptions of VCs, the authors shed new light on the mechanisms involved in their assessment of entrepreneurs, as well as on the drivers and barriers affecting female entrepreneurs.