The 11 Best Cities for Startups

11 Best Cities for Startups

Most discussions of great startup locations center around the same few cities, like Seattle, New York, Toronto and the Bay Area. However, these locations have grown in popularity to the point that the markets are overcrowded and costs are sky-high.

Luckily, there are plenty of other cities that are able to support the startup lifestyle. Let’s take a look at some up-and-coming startup cultures popping up across the country!

1. Austin, Texas

Texas’ state capital has become one of the most sought after cities to work in, both for startup founders and their employees. Austin’s cost of living is very low compared to other major American cities.

Austin has access to an educated workforce, as the University of Texas’ flagship institution is located in the city. It’s also home to a thriving arts and music scene, which means that many Austinites are both highly educated and highly creative.

When it comes to taxation, it’s the best of both worlds for startups and their employees. There’s no state income tax for individuals, and no corporate tax for businesses. No wonder Austin is such a popular spot to launch innovative new companies!

2. Dallas/Fort Worth, Texas

Austin isn’t the only Texas city that’s earned a spot on this list. The Dallas/Fort Worth metroplex, about 200 miles north of Austin, is another great startup environment. While Austin is relatively inexpensive compared to most major American cities, the DFW metropolitan area is even cheaper than Austin. Dallas’ residential and commercial real estate prices are over 20% cheaper than the nationwide median, meaning entrepreneurs and employees alike can save some serious cash.

DFW is also home to over 40 colleges and universities, so there’s an endless supply of educated workers. The three largest public universities in the region alone (University of Texas at Arlington, University of North Texas and UT Dallas) have a combined enrollment of well over 100,000 students. The region’s massive educated workforce and low commercial and residential real estate prices make it a very appealing option for startups.

3. Denver, Colorado

If it seems like everyone knows someone who recently moved to Denver, that’s probably because it’s true. Denver is now the top relocation city in America for skilled workers between age 25 and 44, which means there’s a highly educated, driven workforce ready to staff your startup.

Another big advantage is Denver’s status as a major international airport hub. The city’s conveniently located smack dab in the middle of the country, so it’s easy to fly to Denver from either coast (and vice versa). In addition, Denver is easy to get around, with the 8th-largest rail system in the nation.

On top of all that, Denver also offers fairly reasonable cost-of-living expenses. While housing is about 85% above the national average (a standard figure for major cities), every other aspect of the cost-of-living metric is right around the national average.

4. Las Vegas, Nevada

Sin City is home to a number of major tech-industry trade shows, making the city a hub for technological innovation. Co-working spaces are highly popular in Las Vegas, which means it’s a great place to set up a mobile or remote company.

With a cost of living that’s right around the national average, Las Vegas is another affordable option for startups. Their corporate tax relief can also save business owners a ton of money.

When it comes to startup culture, Las Vegas offers most of the advantages and few of the disadvantages of a major city. Vegas may still be known for its casinos and extravagant shows, but startups are definitely working their way into the conversation!

5. Los Angeles, California

As the second most populous city in the United States (behind NYC), Los Angeles doesn’t exactly fly under anyone’s radar. Still, L.A. probably doesn’t jump to the front of your mind when considering the best American startup cities.

Similar to Silicon Valley, Los Angeles has a very high concentration of engineering students and graduates, making it an excellent location for tech startups. Compared to the Bay Area, L.A.’s cost of living isn’t nearly as steep -- in fact, average housing costs are about half that of San Francisco.

There are tons of major companies based in L.A. (SpaceX, Snapchat and Riot Games to name a few) as well as incredibly diverse social demographics. If you’re looking for a sun-soaked city with a robust startup culture, L.A. is a great place to start.

6. Miami, Florida

Miami has deep roots in Latin American culture and a variety of other cultural communities. If you’re looking for a truly diverse cultural landscape, Miami should jump to the top of your list.

Miami’s cost-of-living index is super reasonable for a major U.S. city, sitting at just 22% above the national average. Florida also has no personal income tax, which makes everything that much more affordable. Between the diverse workforce, reasonable cost of living and favorable tax laws, Miami is simply a great city to launch a startup!

7. Portland, Oregon

Portland doesn’t get nearly as much attention as Seattle, its neighbor 2 ½ hours to the north. It also isn’t nearly as expensive, with an average cost of living about 30% lower than Seattle’s. Furthermore, there’s much less market saturation in Portland, since it’s still a burgeoning startup hub.

Portland is home to a decent venture capital scene that’s really escalated in recent years. The Portland Incubator Experiment and Portland Seed Fund have pretty deep pockets, and they’ve already funded dozens of companies in the Portland metro area.

Throw in the famously fun culture of Portland, and you’re looking at a great place to work and live, whether as an employer or employee. Plus, if you really want to do business in Seattle, it’s less than 3 hours away!

8. Raleigh, North Carolina

The North Carolina capital has the second-least expensive cost-of-living index in this guide (behind Dallas), with expenses right around the nationwide median. In addition, the region is home to many accelerators and incubators, making Raleigh that much more financially appealing.

It’s not all about the money, though -- Raleigh is located in the heart of the regional “Research Triangle,” which refers to the high concentration of major technology and higher education facilities in Raleigh (North Carolina State University), Chapel Hill (University of North Carolina) and Durham (Duke University). Between its highly educated workforce and super-affordable cost of living, it’s no wonder Raleigh is such a hot destination for startups these days.

9. Sacramento, California

Sacramento is on this list for similar reasons as Portland. Sacramento is about a two-hour drive northeast of the Bay Area, and has a cost-of-living index about half as expensive as San Francisco.

Sacramento certainly doesn’t have the lifestyle hype that the Bay Area does, but this capital city still has plenty to offer. It’s close to the mountains and other natural beauty, has a laid-back vibe, and there’s plenty of talented professionals who’ve made their way up from the Bay Area. Plus, like I said about Portland and Seattle, if you need to do business in San Francisco, you’re just a couple hours away.

10. San Diego, California

San Diego’s a unique city: it’s not as crowded or costly as Los Angeles, but it’s definitely more expensive than Sacramento. The city’s best known for its amazing weather and spectacular ocean views -- but it has plenty to offer entrepreneurs as well.

The San Diego area is home to tons of incubators, accelerators and investors -- there’s a constant flow of money surging through the city’s startups as everyone looks for the next big thing. San Diego also has low startup costs, and the job market is not as fiercely competitive as San Francisco’s.

Between the startup-friendly atmosphere and overall high quality of life, it’s no wonder San Diego is becoming such a popular destination for entrepreneurs and employees alike.

11. Washington, D.C.

It’s no secret that our nation’s capital is a highly educated city. Not only does D.C. pull in the best and brightest of the political world, it’s also home to some truly elite higher-education institutions, including Georgetown University, George Washington University and Howard University.

There are also some major incubators and accelerators in D.C., and co-working spaces are popping up all over the place. The city’s startup scene is flush with cash, as venture capital investments exceed $50 billion annually. D.C. is the 21st-largest American city by population, but among the top ten in venture capital investments -- which is awfully inviting for entrepreneurs!

While cities like San Francisco and Seattle remain highly popular locations for startups, they’re such saturated markets and prohibitively costly places to live and work that I don’t think they deserve a place on this list. (Read 10 Most Overrated Cities for Startups)

If you need a change of pace in your career, it could be worth relocating to one of these 11 great cities. It all depends on what you think would be the best fit for you and your startup!

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