From San Diego to Austin and Seattle, these are the 15 best US cities to launch a startup


  • Small businesses make up a staggering 99.9% of all businesses in the US, according to a 2018 report.
  • To find the best cities for startups, software company Volusion took into account the percentage of workers employed by startups, startup density, and cost of living, among other factors.
  • 1.9% of startups in the top city, Seattle, receive venture capital funding, making it a haven for fledgling businesses.
  • Visit Business Insider’s homepage for more stories.

Almost every business in the US is a startup.

According to a 2018 profile by the US Small Business Administration, 99.9% of businesses in the country are startups (businesses with 500 or fewer employees).

To find out which cities were the best places to run a startup, software company Volusion analyzed the 2017 US Census Bureau Annual Survey of Entrepreneurs (ASE). They took into account factors like the percentage of workers employed by startups, startup density, and cost of living, among others.

The top city, which encompasses the Seattle-Tacoma-Bellevue area in Washington, is home to corporate giants Amazon, Starbucks, and Microsoft. Despite those big brands, Seattle is a haven for startups. Around 1.9% of Seattle startups receive venture capital funding — far more than businesses in any other city — which makes their chances of surviving and growing that much better.

Here are the 15 best cities for startups.

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15. Minneapolis – St. Paul – Bloomington (Minnesota and Wisconsin)

Entrepreneurship score: 81.34

Startup density: 7.8%

Percentage of firms receiving venture capital investment: 0.7%

Percentage of self-employed workers: 8.6%

Reason for starting business isn’t lack of work: 79.8%

The Twin Cities don’t just have startup accelerators or incubators — they have Twin Cities Startup Week, which gives entrepreneurs a chance to network and learn from one another.

14. Charlotte – Concord – Gastonia area (North Carolina and South Carolina)

Entrepreneurship score: 81.75

Startup density: 10.3%

Percentage of firms receiving venture capital investment: 0.6%

Percentage of self-employed workers: 8.9%

Reason for starting business isn’t lack of work: 76.9%

In the growing world of fintech, Charlotte has emerged as the new industry’s capital, with companies like LendingTree setting up headquarters there. But it’s a great place for startups, too: the Charlotte Angel Fund is one of many Charlotte-based accelerators.

13. Atlanta – Sandy Springs – Roswell area (Georgia)

Entrepreneurship score: 82.35

Startup density: 10.1%

Percentage of firms receiving venture capital investment: 0.7%

Percentage of self-employed workers: 10.7%

Reason for starting business isn’t lack of work: 76.1%

Atlanta is no stranger to big business: both Coca-Cola and Delta have their headquarters there. But Atlanta is also home to incubators like Atlanta Technology Village for new startups.

12. Phoenix – Mesa – Scottsdale area (Arizona)

Entrepreneurship score: 82.41

Startup density: 9.9%

Percentage of firms receiving venture capital investment: 0.7%

Percentage of self-employed workers: 9.9%

Reason for starting business isn’t lack of work: 80.0%

The Arizona Commerce Authority offers startups the Angel Investment Tax Credit, which amounts to a total of $2.5 million every year.

11. San Diego – Carlsbad area (California)

Entrepreneurship score: 82.7

Startup density: 10.3%

Percentage of firms receiving venture capital investment: 0.7%

Percentage of self-employed workers: 12.0%

Reason for starting business isn’t lack of work: 74.5%

According to a 2016 study by the San Diego Regional Economic Development Corporation (EDC), the city has the second-highest concentration of science and engineering professionals in the country.

10. Kansas City (Missouri and Kansas)

Entrepreneurship score: 83.37

Startup density: 9.2%

Percentage of firms receiving venture capital investment: 0.7%

Percentage of self-employed workers: 8.7%

Reason for starting a business isn’t lack of work: 81.1%

You’ve heard of Silicon Valley, but what about “Silicon Prairie”? That’s the nickname Kansas City earned for its startup culture, which includes LaunchKC, a local startup accelerator.

9. Boston – Cambridge – Newton area (Massachusetts and New Hampshire)

Entrepreneurship score: 83.79

Startup density: 8.1%

Percentage of firms receiving venture capital investment: 0.6%

Percentage of self-employed workers: 8.5%

Reason for starting business isn’t lack of work: 79.3%

Several Boston-area universities have their own startup accelerators. For example, MIT has the LaunchX Summer Program, and Harvard has the Harvard i-lab.

8. Miami – Fort Lauderdale – West Palm Beach area (Florida)

Entrepreneurship score: 84.59

Startup density: 11.2%

Percentage of firms receiving venture capital investment: 0.5%

Percentage of self-employed workers: 14.5%

Reason for starting business isn’t lack of work: 72.1%

Miami is home to several organizations helping startups, including a branch of the Silicon Valley-based accelerator 500 Startups and the University of Miami’s accelerator, the Launch Pad.

7. Portland – Vancouver – Hillsboro area (Oregon and Washington)

Entrepreneurship score: 85.22

Startup density: 9.7%

Percentage of firms receiving venture capital investment: 0.7%

Percentage of self-employed workers: 11.0%

Reason for starting business isn’t lack of work: 79.6%

These three bordering cities are gaining notoriety as the “Silicon Forest” thanks to their numerous startups and incubators. One incubator, VertueLab, only invests in startups with a positive impact on the environment.

6. Raleigh (North Carolina)

Entrepreneurship score: 85.24

Startup density: 9.3%

Percentage of firms receiving venture capital investment: 0.6%

Percentage of self-employed workers: 7.9%

Reason for starting business isn’t lack of work: 79.2%

According to Volusion, Raleigh’s combination of universities (North Carolina State University, Duke University) and accelerators (Triangle Investor Alliance, Wolfpack Investor Network) make it ideal for startups.

5. Denver – Aurora – Lakewood area (Colorado)

Entrepreneurship score: 88.32

Startup density: 10.8%

Percentage of firms receiving venture capital investment: 0.6%

Percentage of self-employed workers: 11.0%

Reason for starting business isn’t lack of work: 77.9%

According to online startup community Built In Colorado, the legal cannabis industry is gaining traction both with the number of startups and consumers.

4. Nashville – Davidson – Murfreesboro – Franklin area (Tennessee)

Entrepreneurship score: 89.25

Startup density: 9.7%

Percentage of firms receiving venture capital investment: 1.1%

Percentage of self-employed workers: 10.6%

Reason for starting business isn’t lack of work: 80.4%

Nashville may be known for country music, but it’s becoming a hub for healthcare startups, including healthcare insurance startup Clover Health.

3. San Jose – Sunnyvale – Santa Clara area (California)

Entrepreneurship score: 90.77

Startup density: 10.1%

Percentage of firms receiving venture capital investment: 1.7%

Percentage of self-employed workers: 8.7%

Reason for starting business isn’t lack of work: 72.4%

San Jose has plenty of programs to get your startup off the ground, like the Silicon Valley Center for Entrepreneurship for students at San Jose State University.

2. Austin – Round Rock (Texas)

Entrepreneurship score: 93.03

Startup density: 11.6%

Percentage of firms receiving venture capital investment: 0.5%

Percentage of self-employed workers: 10.8%

Reason for starting business isn’t lack of work: 80.0%

According to Volusion, Austin has the third-highest startup density in the country.

1. Seattle – Tacoma – Bellevue area (Washington)

Entrepreneurship score: 99.20

Startup density: 10.0%

Percentage of firms receiving venture capital investment: 1.9%

Percentage of self-employed workers: 9.7%

Reason for starting business isn’t lack of work: 77.5%

Seattle’s government is very supportive of startups. The Only in Seattle initiative grants seed money and provides consulting to startups in local business districts.



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