They say everything is bigger in Texas, and when it comes to women in business, they’re right. Fit Small Business recently ranked Texas the No. 1 state for its desirability and outlook for women entrepreneurs. Texas is one of only two states that have been in the top ten two years in a row. Governor Greg Abbott has personally taken on the cause of making Texas the No. 1 state for women entrepreneurs, declaring, “Women business owners are a powerful economic force, and my goal is to make Texas the most welcoming home for them.”
Maybe it’s something in the
margaritas water, or maybe it’s one of the following 10 things that makes Texas the No. 1 state for women entrepreneurs:
1. Access to venture capital
Texas is home to several venture capital firms specifically dedicated to investing in women entrepreneurs. Announcing their VC firm’s first fund, founding general partner Sara Brand declared “When I started True Wealth Ventures, I saw women-led businesses as an extraordinary investment opportunity that had yet to be realized. Texas was a natural choice for this blind spot.” The firm has over $19 million to invest in women-led companies in the next several years.
Texas Women Ventures Capital, founded by three successful Texan businesswomen, has more than $25 million under management dedicated to investing in women entrepreneurs located in Texas and the Greater Southwest. Artemis Fund, also founded by three successful Texas-based businesswomen, was recently launched with $20 million under management to invest in approximately 30 women-led startups. Speaking to the importance of the region, Artemis Fund co-founder Diana Murakhovskaya shared, “I’m enthusiastic about launching The Artemis Fund in Texas. Houston, in particular, is uniquely positioned to be the next big tech hub.”
Central Texas Angels Network (CTAN) is another notable source of investment for women entrepreneurs in Texas. The most-active angel investing group in the United States, 30 percent of CTAN’s angels are women. While CTAN makes investments regardless of gender, its diverse network and female executive director help counteract biases women founders face.
Popular dating app Bumble, headquartered in Austin, is another resource for women entrepreneurs in Texas. Bumble Fund, the company’s investment arm, makes early-stage investments, primarily in businesses founded and led by women of color. While they don’t exclusively focus on Texas-based companies, proximity to the investors can’t hurt.
2. Affordable cost of living
With all of the expenses that go into building a business, it can be tough to thrive even after fundraising. In Texas, though, a dollar goes a lot farther than it does in other states. Living wage measures the amount people need to earn in order to reach a certain lifestyle. According to research from Massachusetts Institute of Technology, the living wage is 27.2 percent more in California than in Texas. This lower cost of living makes it easier for founders to convince candidates to relocate from across the globe to Texas.
3. High quality of life
The cost of living is low, and you may even get more than you pay for. From the great outdoors to good public schools, from average annual temperatures of 69.4 degrees to safe, family-friendly neighborhoods, life is good in Texas.
Austin, in particular, consistently takes the top spot on lists of America’s most desirable places to live. It isn’t just Austin, though. Looking at data on safety, health, job opportunities and more, Business Insider came up with a list of the 25 cities with the best quality of life in the U.S. Seven Texas cities made the cut, making it the state with the most cities in the top 25. This high quality of life helps business owners attract and retain top talent.
4. Large workforce
On average, more than 1,000 people move to Texas every day. Many of these people are professionals moving in connection with an employer’s corporate relocation. This creates a strong pool of potential hires for women building their businesses in Texas. In thinking about growing her team in Texas, Outdoor Voices Founder and CEO Ty Haney admits, “At first, I was nervous that we wouldn’t be able to attract talent at all. But being away from New York has actually become an advantage.”
5. Diverse talent pool
We all know diversity helps power innovation and business success. Particularly for small business owners and startups, the ability to innovate is crucial. Luckily for people building businesses in Texas, the state is one of the most ethnically diverse states in the country. More than a third of Texans speak a language other than English at home. In fact, Texans collectively speak over 160 languages. For female entrepreneurs building companies in Texas, this diverse talent pool helps drive ingenuity and success.
6. Affordable office space
A growing team will need more space. It’s a good problem to have, but could be a crisis in certain coastal cities. Not in Texas’ cities, where office space is relatively abundant and affordable.
In New York City, the average price per square foot of office space is $74.00. The average price per square foot of office space in San Francisco is $65.16. In Dallas and Houston, that number plummets to $23.09 and $28.34, respectively, per square foot of office space. With office rent being one of the highest monthly expenses for companies, the much lower costs in Texas helps business owners survive and thrive.
Take Kendra Scott, for example. Scott started her eponymous jewelry line just before the 2008 financial crisis. Looking back, she recalls, “I had people tell me I had to get out of Austin and move to L.A. or New York City to be a legitimate fashion brand. But something in my gut told me to stay.” Luckily Scott stayed, and was able to weather the financial crisis thanks to the lower cost of doing business in Texas. Over a decade later, Scott’s billion-dollar company is still based in Austin.
7. Location, location, location
Texas’ central location is another draw for people seeking to build a solid business. Discussing what she loves about her company’s headquarters in Dallas, female founder Charissa Thornton Fitch enthused that, “Because Dallas is so centrally located, it is easy to access many locations in the U.S. I can easily fly two hours to Atlanta to meet with my IP attorneys or three hours to the west coast to meet with a potential packaging supplier. I’ve found simple geography to be one of the great things about starting a business in Dallas!” The central time zone also makes phone calls to either coast more convenient, a small but helpful benefit.
8. Tax benefits
Benjamin Franklin once said that, “In this world nothing is certain, except death and taxes.” While they haven’t solved death, Texas legislators work hard to minimize taxes on business owners. With no corporate tax or personal income tax, Texas has one of the lowest tax burdens on business owners in the country. Further, business owners in Texas receive a sales tax exemption for research and development-related materials, software and equipment. This competitive tax climate helps women founders invest directly in growing their businesses and boosting their bottom lines.
9. Community of women founders
Starting and running your own business can be a rollercoaster ride. Some days you’re on top of the world, and other days you want to call it quits. Entrepreneurs thrive best in communities where they can celebrate and commiserate with fellow entrepreneurs who know what they’re going through.
In Texas, the density of women entrepreneurs creates a virtuous cycle that attracts more women into the fold and helps keep them there when things get tough. According to 2016 Census data, the number of women-owned firms in Texas rose by 63 percent between 2007 and 2016. Nationally, growth was just 9 percent over that same period of time. This large and growing community is an important part of what makes Texas the No. 1 state for women entrepreneurs.
10. Women-Friendly Infrastructure
Last but not least, Texas’s women-friendly infrastructure helps make it the No. 1 state for women to build their businesses. There’s a supportive infrastructure women founders can lean on in Texas. Explaining why The Riveter chose Austin as the first city in its national expansion, Founder and CEO Amy Nelson noted, “Austin has been blazing its own trail since its inception, and the female founder community is building an incredible movement that we are excited to be a part of.”
Echoing Nelson’s sentiment and explaining her company’s move from New York City to Austin, Outdoor Voices CEO Ty Haney affirmed, “It struck me that the city is super supportive of entrepreneurship.” The access to resources, programming and experts that this infrastructure provides women helps propel their business’ success.
So everything is bigger in Texas, but not everything can be quantified. Summing up why Texas is the perfect place for founders, Kendra Scott points to the state’s outsider mentality. “The way we see it, we are not competing with each other but competing against the world,” Scott says. “So why not lift each other up?”
Kelli Newman Mason is Head of Talent at New Knowledge. She lives in Austin, Texas, with her husband and two children.