Evaluating the top cities for startups can be done in a number of ways. One of the best lists is the annual Kauffman Index, which ranks the top metropolitan areas for startups by entrepreneurial activity.
If you're considering starting a new venture and aren't sure where to set up shop, take a close look at these five startup hubs:
1. Austin, Texas (averaging 550 new entrepreneurs per month per 100,000 residents, according to the Kauffman Foundation)
Austin is at the top of the list of top cities for startups largely because of Startup Texas, an organization dedicated to promoting entrepreneurship in the state. It's also well known for its business incubators and accelerators, notes Vator, including The Capital Factory, TechStars Austin and The Incubation Station. Access to mentors and capital makes Austin a haven for entrepreneurs.
Entrepreneurs flock to Austin, Texas, in part because of the state's low tax burden, too. Texas levies no corporate or personal income tax, drawing in both businesses and residents interested in working at, or buying from, these businesses.
2. Miami, Florida (520 new entrepreneurs per month)
A gateway to Latin America, Miami brings in startups interested in tapping into that international market. The availability of venture capital and the strong presence of groups like the Young Presidents' Organization help startups grow there, too.
In addition to being sunny and warm, Florida is also hot for business, with no state personal income taxes and a low, flat corporate tax rate of 5.5 percent.
3. San Jose, California (410 new entrepreneurs per month)
In San Jose, startups have an easier time finding qualified candidates to fuel their growth thanks to resources like StartUpHire and events like Startup Weekend, which are designed to connect new entrepreneurs with the resources they need to grow.
California doesn't offer lower taxes — in fact, the state's are among the highest in the nation — but it has a dense population and a high rate of business success.
4. Los Angeles, California (500 new entrepreneurs per month)
Known as an entertainment hub, Los Angeles is quickly becoming a hotbed of entrepreneurship thanks to organizations dedicated to attracting new businesses. Silicon Beach LA, for example, connects startups with investors and other needed resources.
5. Denver, Colorado (370 new entrepreneurs per month)
Both Boulder and Denver are typically found on lists of top cities for startups, thanks to their availability of incubators and capital. What Denver has going for it is a supportive, dense community of startups to help business owners make connections.
If you're starting a technology business and need talent, Colorado may be the best place to open. The density of technology startups and the number of business loans made annually put Colorado at the top of the list for startups, according to NerdWallet.
Startup-friendly cities offer a lot of benefits to entrepreneurs if you know where to look. Be sure to include these five in your research.
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