Rice research: Incentives increase employee contribution to company success

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Allowing employees to select their incentives increases both the quantity and quality of their ideas. Photo via Getty Images

Companies can increase not only the volume but also the quality of employee suggestions and ideas by offering rewards and a choice, according to a study we published in 2022.

We conducted the study on 345 telemarketers at a call center in Taiwan, which already had a suggestion program set up to solicit creative ideas to improve the organization. The company rewarded those who suggested ideas deemed the most valuable by giving them a trophy.

We wanted to see how tweaking the reward changed the quantity and quality of suggestions. So we invited the employees to submit ideas and that if their suggestions ranked among the top 20% most creative ideas – as evaluated by a team of managers and researchers – they would receive one of four rewards: US$80 in cash for themselves, $80 to share with colleagues, $80 to give to a preferred charitable organization or priority when selecting days off. About half of the employees were offered a choice of the four rewards they would receive for submitting ideas. We then randomly assigned one of the four rewards to the remaining employees.

In total, we received and evaluated 144 ideas over a one-month period.

We found that employees who were given a choice of reward submitted 86% more ideas than those who were told what they would be getting. Moreover, the average creativity score of their ideas was 82% higher. Overall, our suggestion program elicited double the number of ideas as the company’s own program and resulted in ideas that were ranked 84% more creative.

Why it matters

Soliciting employee ideas can be a key driver of innovation in organizations.

When employees share their ideas about products, services or policies using a suggestion program, an organization can take those ideas and refine and then implement them.

These implemented ideas can enhance an organization’s ability to adapt and compete. A 2003 study of 47 organizations found that ideas submitted to employee suggestion programs saved those organizations more than $624 million in a single year.

Our own study suggests small incentives could have a significant impact on the quantity and quality of those employee suggestions.

What’s next?

Research is still needed on whether there is an optimal number of rewards that organizations should offer to get more submissions. One past study found that when employees were asked to choose from a large set of rewards, they felt overwhelmed and produced few ideas.

Future research can also test whether our results can be found in other types of organizations, with employees in other types of jobs and in other parts of the world. We plan to examine these issues in our future studies of suggestion programs.

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This article originally ran on Rice Business Wisdom and was based on research from Jing Zhou, the Mary Gibbs Jones Professor of Management and Psychology in Organizational Behavior at the Jones Graduate School of Business of Rice University.

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Managers can nurture creativity, even in workers who appear less creative, by building a supportive environment. Image via Pexels

Workplaces need to support and encourage creativity, according to Houston research

houston voices

Give a kid a toy car, a stuffed bear, or an armful of blocks, and she is off on an imaginative romp, staging epic battles, building palaces or creating new worlds.

Coaxing creativity from adults is more challenging. But if creativity in children develops their spirits, creativity in adults enriches productivity — especially at the office.

It’s simple math. Creativity is where ideas come from; ideas form the basis for innovation. In an increasingly competitive world economy, it’s innovation that allows businesses to survive and thrive. This makes creativity a prized commodity in the job market. For managers, cultivating creativity in their workforce is a crucial professional skill.

Identifying the best circumstances to make creativity bloom is one of the driving questions in a study by Rice Business Professor Jing Zhou and colleague Inga J. Hoever, a professor at the Barcelona School of Management in Spain.

To explore the mystery of creativity, the two scholars first reviewed the hefty body of research by organizational psychologists and management scholars who’ve studied innovation in employees and teams. Most early research in this field, published since 2000, focused on the creativity of the actor — the individual or the team — or else revolved around the work environment.

Current academic research takes a more holistic look. By studying the interaction between the character traits of the worker or the team, the leader or the supervisor, and the prevailing atmosphere at the workplace, researchers are unveiling new insights.

Studies show, for example, that the benefits of benevolent leadership expand when workers recognize creativity as an important component of their role. Not only that, creativity is highest in employees who experience high levels of both positive and negative moods and feel supported by their supervisors. Other research finds that leaders who empower their workers get a greater payback in creativity.

To explore these findings further, Zhou and Hoever developed a typology that sorts out research about workplace creativity based on interactions between the worker (which they call the “actor”) and the workplace (which they call “context”).

The best-case scenario is a positive actor in a positive context, a mix that is synergistic for creativity. Worst case: When a positive actor languishes in a negative context or, similarly, when a negative actor stews in a positive context. At the extreme end of possibility, a negative actor in a negative context is downright antagonistic to creativity, Zhou and Hoever found.

There’s one final type of employee-workplace interaction: the “configurational” experience, which includes factors that are neutral in shaping creativity, but, when combined with other factors, cause a kind of chemical reaction that boosts or blocks creativity.

Zhou’s research serves up some bad news and good news for managers. Choosing and hiring employees who are creative is not enough, it turns out. If your workplace is discouraging, creativity will wither in almost anyone. On the brighter side, cultivate a nurturing environment and creative tendrils may sprout even in the most no-nonsense workers. Best of all, good managers can build a nurturing greenhouse environment. Practically speaking, it means that companies can and should train supervisors to cultivate creativity in their management choices.

Plenty of research gaps remain, however. To fill them, Zhou has outlined an ambitious agenda for future research, including a close look at the impact of workplaces on collective creativity; exploring as-yet unidentified factors in workers and work settings that spark creative thinking; and seeking ways to vanquish the effects of unsupportive environments.

Making creativity happen at work, in other words, isn’t child’s play.

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This article originally ran on Rice Business Wisdom and was based on research from Jing Zhou, the Mary Gibbs Jones Professor of Management and Psychology in Organizational Behavior at the Jones Graduate School of Business of Rice University.

A new program within Rice University's Executive Education school will foster education for corporate innovation. Photo courtesy of Rice

New program at Rice University to educate corporate leaders on innovation

tables have turned

As important as it is to foster innovation among startups, there's another side of the equation that needs to be addressed, and a new program at Rice University plans to do exactly that.

Executive Education at Rice University's Jones Graduate School of Business, which creates peer-based learning and professional programs for business leaders, has created a new program called Corporate Innovation. The program came about as Executive Education, which has existed since the '70s, has evolved over the past few years to create courses and programs that equip business leaders with key management tools in a holistic way.

"We realized we need to open the innovation box," says Zoran Perunovic, director of Executive Education and is also a member of the Innovation Corridor committee and a mentor at TMCx.

The program, which is open for registration and will take place September 28-30, will flip the script on how innovation is normally discussed and observed and instead take a holistic approach to innovation in a corporate setting.

"In the innovation space, you have two lines — one is the entrepreneurial and the other is happening in large, established organizations," Perunovic tells InnovationMap. "The mechanisms of innovation within in those companies are different than the entrepreneurial."

The course's professor is Jing Zhou, Mary Gibbs Jones Professor of Management and Psychology – Organizational Behavior, and she says that when people think "innovation" they think of startups or technology. However, when it comes to innovation at the corporate level, it's so much more than that.

"In the past, we think about corporate innovation, we think about technological advancements. Because we have so many world-class organizations in Houston, we feel like we are doing a good job," Zhou says.

"Innovation definitely includes technology, but it also involves new business models, new way of meeting customers, new work processes — everything we do in a large corporation, there's always a better way of doing it. That's our definition of our corporate innovation."

Zoran Perunovic (left) anf Jing Zhou created the Corporate Innovation program housed in Rice's Executive Education department. Photos courtesy of Rice

Zhou and Perunovic designed the program to target business professionals from all areas of the corporate world.

"People, managers, professionals, executives in all functional areas of business can benefit from this program," Zhou says. "We don't teach to just one function area. We teach the fundamental principles of how to drive innovation and broaden the cognitive space."

Perunovic concurs with his colleague and adds that, "everyone is relevant — that's the future of innovation." Another aspect of the program that's forward thinking is the idea of cross-industry innovation collaboration.

"In all our programs, especially this one, we are not encouraging members from one type of industry to join. We want diversity of industry," Perunovic says.

The program has an advisory board comprised of business leaders in Houston. The program's board is made up of:

  • Tanya Acevedo, chief technology officer of Houston Airport System
  • Barbara Burger, vice president of innovation at Chevron and president of Chevron Technology Ventures
  • Gareth Burton, vice president of technology at American Bureau of Shipping
  • David Hatrick, vice president of innovation at Huntsman Advanced Materials
  • Roberta L. Schwartz, executive vice president and chief innovation officer at Houston Methodist

Industry, position, and company notwithstanding, the program has value across the board in Houston, now more than ever.

"Innovation is no longer optional for large organizations," Zhou says. "It's required in whatever you do, and whatever space you're competing in."

Slightly-to-moderately overqualified workers are more likely to be valuable and to reimagine their duties in ways that advance their institutions. Getty Images

Rice Business research finds benefit to hiring overqualified employees

Houston voices

You're a rocket scientist. You've worked for NASA. You won a Nobel Prize. Shouldn't your qualifications give you an edge on a software developer job?

According to typical hiring practice, the answer is no. You might not even get an interview for a job sweeping the floor. That's because, for years, research has warned that hiring applicants with too much experience or too many skills will saddle you with employees who don't appreciate their jobs.

Now there's good news for rocket scientists and others who happen to be overqualified for their work. According to a groundbreaking new study coauthored by Rice Business professor Jing Zhou, workers who are slightly to moderately overqualified are actually more likely to be active and creative contributors to their workplace. As a result, they're more likely to be assets. The study adds to a new body of research about the advantages of an overqualified workforce.

Zhou's findings have widespread implications. Worldwide, almost half of the people who work for a living report that they are overqualified for their jobs. That means Zhou's research, conducted with Bilian Lin and Kenneth Law of the Chinese University of Hong Kong, applies to a vast segment of the labor market.

To reach its conclusions, Zhou's team launched two separate studies in China. The first looked at six different schools with a total of 327 teachers and 85 supervisors. The second analyzed an electronic equipment factory with 297 technicians. Both studies revealed a strong link between perceived slight and moderate overqualification and the frequency of "task crafting," that is, expanding the parameters of the work in more innovative and productive ways.

In the school study, teachers who were slightly to moderately overqualified set up new online networks with students and parents. They also rearranged classrooms in ways that made students more engaged and productive. Meanwhile, in the factory, workers took tests to gauge their abilities in complex tasks designing a ship. The ones who were slightly to moderately overqualified built more complex versions that reflected their superior competencies.

The key to both sets of workers' superiority was their impulse to "job craft." Every worker leaves a personal imprint: meeting the bare minimum of criteria, pushing to exceed expectations, innovating or imagining new or more useful ways of getting the job done. Expert "job crafters" turn this impulse into an art. Some redraw their task boundaries or change the number of tasks they take on. Others reconfigure their work materials or redefine their jobs altogether. Still others rearrange their work spaces and reimagine their work procedures in ways that can catapult their productivity upward.

For overqualified workers, Zhou's team found, task crafting is a psychological coping mechanism – a welcome one. Workers want to show their superiors the true level of their skills. Doing so fortifies their self-esteem and intensifies their bonds with the company they work for. Far from being dissatisfied, these overqualified workers are more productive, keen to help their organizations and interested in finding ways to be proud of their work.

So how did the outlook on such workers go from shadowy to brilliant? Past research, it turns out, focused rigidly on the fit between worker experience and a task. It didn't consider the nuanced human motivations that go into working, nor the full range of creativity or flexibility possible in getting a job done.

Thus, older studies cautioned that overqualified workers are likely to feel deprived and resentful. Zhou's research shows the opposite: a statistical correlation between worker overqualification and high job performance.

Organizations do need to do their part for this alchemy to work. Above all, Zhou writes, it's crucial to build a strong bond between worker and institution. This is because workers who identify strongly with their workplace feel more confident that their job-crafting efforts will be well received; those who don't feel this strong bond often feel mistreated and give up the project of crafting their work.

Similarly, companies also need to grant workers flexibility to expand the scope or improve the process of their jobs. The outcome can be the evolution of the entire business in unexpected and often creative ways.

Not all super-qualified workers will be inspired to re-craft their tasks. When the gulf between skills and task is extreme, Zhou writes, workers are bored and job crafting loses its juice as an incentive. For more moderately overqualified employees, however, their expertise should rocket their CVs to the top of the stack. For seasoned workers, the evidence shows, a job is not just a job. It's an adventure in finding ways to be excellent.

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This story originally ran on Rice Business Wisdom.

Jing Zhou is the Mary Gibbs Jones Professor of Management and Psychology in Organizational Behavior at the Jones Graduate School of Business of Rice University.

This Halloween, consider your office costume contest or luncheon social a productive part of the day. Socialization in the office has been linked to greater creativity, according to a Rice University researcher. Getty Images

Rice University research finds that office socializing can be a pathway to innovation and creativity

Houston voices

Innovation is a team sport. We know that creative workplaces represent a series of social networks, each brimming with useful ideas and expertise. And there is clearly a link between innovation within a firm and the colleagues and friends with whom employees hobnob off duty.

But how exactly does that alchemy happen? What's the relationship between creativity and the hive of direct and indirect contacts in an employee's cell phone?

A recent study by Jing Zhou of the business school, Giles Hirst of Australian National University, Daan Van Knippenberg of Erasmus University, Eric Quintane of the University of Los Andes and Cherrie Zhu of Monash University sheds new light on this. Mapping the social networks that underlie a creative workplace, the researchers showed that employee creativity rises when social networks are more diverse.

The researchers started with the premise that direct links in a network are offshoots of larger networks. The more diverse these indirect networks are, the researchers found, the more likely that innovative concepts will appear in a company's intellectual landscape.

The most efficient resources for gathering novel perspectives are networks made up of two-step "non-redundant ties"—that is, people you may not interact with directly, but with whom your direct ties do interact. These contacts are effectively the raw material employees use to come up with new ideas and ways of working. But why are these indirect networks so important? They diversify the thinking of the group, Zhou and her colleagues argue. Because these networks include individuals who are not necessarily linked, they lower the chances of groupthink or stale ideas.

To test their hypothesis, the researchers looked at the social networks of a large, state-owned pharmacy corporation in the People's Republic of China. Examining 11 divisions, each with roughly 25 sales representatives, the team studied creativity among the sales representatives. Evenly divided between men and women, the representatives were, on average, 35 years of age with approximately 10 years' of experience. Some had developed networks so large that they reached beyond the corporation's geographic territory.

The representatives' creativity manifested itself in a range of forms: new ways to promote products, strategies to cross-sell products, ideas for connecting with hard-to-access sales targets and plans for boosting client sales. The ideas included making products more visible in retail outlets and personalizing product launches to push customers to specific distributors. Because this kind of inventiveness is critical to gaining an edge, it's one of the most important tools in pharmaceutical marketing.

The researchers devised a matrix that matched sales metrics and managers' creativity rankings to the types of social networks the representatives had. The map showed clearly that a two-step, indirect network with few redundancies correlated to individual creativity. When networks were further removed than this, employee creativity was unchanged.

The implication: Firms should attend closely to the kind of social networks their workers cultivate. Not only that, it's possible to teach employees how to design networks for maximum efficiency. Persuading employees to make that effort might be another matter. Luckily, possible incentives abound, from bonuses to the satisfactions of a varied network to the simple pleasure of a more ample expense account. Executives just need to get creative in making their case.

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This story originally ran on Rice Business Wisdom.

Jing Zhou is the Mary Gibbs Jones Professor of Management and Psychology in Organizational Behavior at the Jones Graduate School of Business of Rice University.

New ideas can be crucially important to businesses, driving innovation and preventing stagnation. Recognizing those ideas, though, isn't always easy. Getty Images

Rice University research determines the best way to promote innovation in the workplace

Houston Voices

Whenever the late surgeon Michael DeBakey opened a human chest, he drew on a lifetime of resources: the conviction that heart surgery could and should be vastly improved, the skill to venture beyond medicine's known horizons and the vision to recognize new ideas in everyone around him, no matter how little formal training they had.

Appreciating new ideas is the heartbeat of business as well as medicine. But innovation is surprisingly hard to recognize. In a pioneering 2017 article, Rice Business Professor Jing Zhou and her colleagues published their findings on the first-ever study of the traits and environments that allow leaders to recognize new ideas.

Recent decades have produced a surge of research looking at how and when employees generate fresh ideas. But almost nothing has been written on another crucial part of workplace creativity: a leader's ability to appreciate new thinking when she sees it.

Novelty, after all, is what drives company differentiation and competitiveness. Work that springs from new concepts sparks more investigation than work based on worn, already established thought. Companies invest millions to recruit and pay star creatives.

Yet not every leader can spot a fresh idea, and not every workplace brings out that kind of discernment. In four separate studies, Zhou and her coauthors examined exactly what it takes to see a glittering new idea wherever it appears. Their work sets the stage for an entirely new field of future research.

First, though, the team had to define their key terms. "Novelty recognition" is the ability to spot a new idea when someone else presents it. "Promotion focus," previous research has shown, is a comfort level with new experiences that evokes feelings of adventure and excitement. "Prevention focus" is the opposite trait: the tendency to associate new ideas with danger, and respond to them with caution.

But does having "promotion focus" as opposed to "prevention focus" color the ability to see novelty? To find out, Zhou's team came up with an ingenious test, artificially inducing these two perspectives through a series of exercises. First, they told 92 undergraduate participants that they would be asked to perform a set of unrelated tasks. Then the subjects guided a fictional mouse through two pencil and paper maze exercises.

While one exercise showed a piece of cheese awaiting the mouse at the end of the maze (the promise of a reward), the other maze depicted a menacing owl nearby (motivation to flee).

Once the participants had traced their way through the mazes with pencils, they were asked to rate the novelty of 33 pictures – nine drawings of space aliens and 24 unrelated images. The students who were prepped to feel an adventurous promotion focus by seeking a reward were much better at spotting the new or different details among these images than the students who'd been cued to have a prevention focus by fleeing a threat.

The conclusion: a promotion focus really does create a mental lens through which new ideas are more visible.

Zhou's team followed this study with three additional studies, including one that surveyed 44 human resource managers from a variety of companies. For this study, independent coders rated the mission statements of each firm, assessing their cultures as "innovative" or "not innovative." The HR managers then evaluated a set of written practices – three that had been in use for years, and three new ones that relied on recent technology. The managers from the innovative companies were much better at rating the new HR practices for novelty and creativity. To recognize novelty, in other words, both interior and external environments make a difference.

The implications of the research are groundbreaking. The first ever done on this subject, it opens up a completely new research field with profound questions. Can promotion focus be created? How much of this trait is genetic, and how much based on natural temperament, culture, environment and life experience? Should promotion focus be cultivated in education? If so, what would be the impact? After all, there are important uses for prevention focus, such as corporate security and compliance. Meanwhile, how can workplaces be organized to bring out the best in both kinds of focus?

Leaders eager to put Zhou's findings to use right away, meanwhile, might look to the real-world model of Michael DeBakey. Practice viewing new ideas as adventures, seek workplaces that actively push innovation and, above all, cultivate the view that every coworker, high or low, is a potential source of glittering new ideas.

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This story originally ran on Rice Business Wisdom.

Jing Zhou is the Mary Gibbs Jones Professor of Management and Psychology in Organizational Behavior at the Jones Graduate School of Business of Rice University.

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9 can't-miss Houston business and innovation events for April

where to be

Two new conferences will launch while another longtime business competition celebrates its 25th anniversary this month in Houston. Plus, there are networking opportunities, family tech events and more.

Here are the Houston business and innovation events you can't miss in April and how to register. Please note: this article might be updated to add more events.

​Ion Block Party: Art Crawl

Network and socialize with other tech enthusiasts and business-minded individuals while taking in the new gallery at Community Artists’ Collective and experiencing the immersive dome at Omnispace360. See work by Joel Zika, who will showcase his digital sculptures through augmented reality screens, and other public art around the Ion while also enjoying food and drink.

This event is Thursday, April 3, from 4-7 p.m. at the Ion. Click here to register.

​CLA Presents: Raising Capital over Happy Hour

Gain a better understanding of the capital-raising process and various funding opportunities at this educational happy hour. Keith Davidson, the market leader for CLA in Dallas and former CFO of ICS, will present.

This event is Thursday, April 10, from 4-6 p.m. at The Cannon. Click here to register.

Rice Business Plan Competition 

The Rice Alliance for Technology and Entrepreneurship will host the 25th annual Rice Business Plan Competition this month. Forty-two student-led teams from around the world, including one team from Rice, will present their plans before more than 300 angel, venture capital, and corporate investors to compete for more than $1 million in prizes.

This event is April 10-12. Stream the Elevator Pitch Competition and Final Round here.

RSVF Annual Conference

The Rice Student Venture Fund will host its first-ever Annual Conference to celebrate the university's entrepreneurial spirit and the rising generation of student-led innovation. The conference will include live startup demos, an RSVF fund update, a keynote fireside chat, a builder-investor panel and networking. RSVF welcomes students, alumni, investors, faculty and staff, and innovators and community members of the broader tech scene.

This event is Monday, April 14, from 4-8 p.m. at the Ion. Click here to register.

​TEX-E Conference

TEX-E will host its inaugural conference this month under the theme "Energy & Entrepreneurship: Navigating the Future of Climate Tech." The half-day conference will feature a keynote from Artemis Energy Partners CEO Bobby Tudor as well as panels with other energy and tech leaders from NRG, Microsoft, GE Vernova and TEB Tech.

This event is Tuesday, April 15, from 1-4:30 p.m. at the Ion. Click here to register.

Houston Methodist Leadership Speaker Series 

Hear from Dr. Jonathan Rogg, Chief Quality Officer and Vice President of Operations at Houston Methodist Hospital and a a practicing emergency medicine physician, at the latest Houston Methodist Leadership Speaker Series. Rogg will present "Leadership from the Bedside to the Boardroom."

This event is on Wednesday, April 23, from 4:45-6 p.m. at the Ion. Click here to register.

Ion Family STEAM Day– Let's Build a Tripwire Alarm

STEAM on Demand will host a hands-on, family-friendly engineering lesson for young ones on the Ion Forum Stairs. Kids will learn to create and test their own working alarm system. The event is geared toward those ages 7 to 14.

This event is Sunday, April 26, from 10 a.m. to noon at the Ion. Click here to register.

 Greentown Houston Fourth Anniversary Transition On Tap

Climatetech incubator Greentown Labs will celebrate its fourth anniversary with a special edition of its signature networking event, Transition On Tap. Entrepreneurs, investors, students, and friends of climatetech are invited to attend.

This event is Tuesday, April 29, from 5:30-7:30 p.m. at Greentown Labs. Click here to register.

Integrate Space Technology Into Your Small Biz

The SBA Houston District Office and the UH Technology Bridge will host a collaborative event designed to help small businesses leverage space technology for prototype development. Attendees will also hear from industry experts on resources and gain access free technical engineering assistance to help accelerate their businesses.

This event is Wednesday, April 30, from 9:30-11:30 a.m. at UH Technology Bridge Innovation Center. Click here to reserve your spot.

Texas university's innovative 'WaterHub' will dramatically reduce usage by 40%

Sustainable Move

A major advancement in sustainability is coming to one Texas university. A new UT WaterHub at the University of Texas at Austin will be the largest facility of its kind in the U.S. and will transform how the university manages its water resources.

It's designed to work with natural processes instead of against them for water savings of an estimated 40 percent. It's slated for completion in late 2027.

The university has had an active water recovery program since the 1980s. Still, water is becoming an increasing concern in Austin. According to Texas Living Waters, a coalition of conservation groups, Texas loses enough water annually to fill Lady Bird Lake roughly 89 times over.

As Austin continues to expand and face water shortages, the region's water supply faces increased pressure. The UT WaterHub plans to address this challenge by recycling water for campus energy operations, helping preserve water resources for both the university and local communities.

The 9,600-square-foot water treatment facility will use an innovative filtration approach. To reduce reliance on expensive machinery and chemicals, the system uses plants to naturally filter water and gravity to pull it in the direction it needs to go. Used water will be gathered from a new collection point near the Darrell K Royal Texas Memorial Stadium and transported to the WaterHub, located in the heart of the engineering district. The facility's design includes a greenhouse viewable to the public, serving as an interactive learning space.

Beyond water conservation, the facility is designed to protect the university against extreme weather events like winter storms. This new initiative will create a reliable backup water supply while decreasing university water usage, and will even reduce wastewater sent to the city by up to 70 percent.

H2O Innovation, UT’s collaborator in this project, specializes in water solutions, helping organizations manage their water efficiently.

"By combining cutting-edge technology with our innovative financing approach, we’re making it easier for organizations to adopt sustainable water practices that benefit both their bottom line and the environment, paving a step forward in water positivity,” said H2O Innovation president and CEO Frédéric Dugré in a press release.

The university expects significant cost savings with this project, since it won't have to spend as much on buying water from the city or paying fees to dispose of used water. Over the next several years, this could add up to millions of dollars.

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A version of this story originally appeared on our sister site, CultureMap Austin.

Texas female-founded companies raised more than $1 billion in 2024, VC data shows

by the numbers

Female-founded companies in Dallas-Fort Worth may rack up more funding deals and more money than those in Houston. However, Bayou City beats DFW in one key category — but just barely.

Data from PitchBook shows that in the past 16 years, female-founded companies in DFW collected $2.7 billion across 488 deals. By comparison, female-founded companies in the Houston area picked up $1.9 billion in VC through 343 deals.

Yet if you do a little math, you find that Houston ekes out an edge over DFW in per-deal values. During the period covered by the PitchBook data, the value of each of the DFW deals averaged $5.53 million. But at $5,54 million, Houston was just $6,572 ahead of DFW for average deal value.

Not surprisingly, the Austin area clobbered Houston and DFW.

During the period covered by the PitchBook data, female-founded companies in the Austin area hauled in $7.5 billion across 1,114 deals. The average value of an Austin deal: more than $6.7 million.

Historically, funding for female-established companies has lagged behind funding for male-established companies. In 2024, female-founded companies accounted for about one-fourth of all VC deals in the U.S., according to PitchBook.

PitchBook noted that in 2024, female-founded companies raised $38.8 billion, up 27 percent from the previous year, but deal count dropped 13.1 percent, meaning more VC for fewer startups. In Texas, female-founded companies brought in $1.3 billion last year via 151 deals. The total raised is the same as 2023, when Texas female founders got $1.3 billion in capital across 190 deals.

“The VC industry is still trying to find solid footing after its peak in 2021. While some progress was made for female founders in 2024, particularly in exit activity, female founders and investors still face an uphill climb,” says Annemarie Donegan, senior research analyst at PitchBook.

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