Entrepreneurs

10 Cities With the Hottest Startup Activity

A new report from the Kauffman Foundation pinpoints where you'll find the most startup opportunity across the country.
10 Cities With the Hottest Startup Activity
Image credit: Camilo Morales | Getty Images
Entrepreneur Staff
Staff Writer. Covers leadership, media, technology and culture.
2 min read

If you think you’ll have to move to the Bay Area to get a foothold in the startup world, think again.

This week, the Kauffman Foundation released its annual Startup Activity Index that explores the state of entrepreneurship across the United States. According to the data assembled in the report, the home of Google, Facebook and Twitter doesn’t even crack the top 10. Neither does Amazon and Microsoft’s hometown of Seattle.

Related: The 10 Best Cities for Retirement

Of the 40 cities ranked in the report, researchers found that from 2016 to 2017, the cities that had the biggest boost in startup activity were , St. Louis,  Cincinnati and San Antonio, while Nashville, Tenn., Baltimore and Columbus, Ohio, saw their activity rates decline. The bottom five on the list were Philadelphia, Minneapolis, Indianapolis, Milwaukee and Pittsburgh.

The report weighed three factors when assessing each city’s fitness as a startup hub: the rate of new entrepreneurs; the opportunity share of new entrepreneurs (which is the percentage of business owners who left who minimum wage and salaried gigs, other labor market statuses and school to start their companies); and startup density, or the number of startups out of every 1,000 businesses in the area.  

Read on for the top 10 ranked cities.

 
10 Cities With the Hottest Startup Activity

Miami-Fort Lauderdale-Pompano Beach

Miami-Fort Lauderdale-Pompano Beach
Image credit: roberto bowyer | Getty Images

Rank 2016: 2

Rate of new entrepreneurs: 0.56 percent 

Opportunity share of new entrepreneurs : 81.09 percent 

Startup density: 107.8

10 Cities With the Hottest Startup Activity

Austin-Round Rock-San Marcos

Austin-Round Rock-San Marcos
Image credit: John Cabuena Flipintex Fotod | Getty Images

Rank 2016: 1

Rate of new entrepreneurs: 0.51 percent 

Opportunity share of new entrepreneurs : 84.73 percent 

Startup density: 104.5

10 Cities With the Hottest Startup Activity

Los Angeles-Long Beach-Santa Ana

Los Angeles-Long Beach-Santa Ana
Image credit: Daniel Viñé Garcia | Getty Images

Rank 2016: 3

Rate of new entrepreneurs: 0.56 percent 

Opportunity share of new entrepreneurs : 80.03 percent 

Startup density: 92.3

10 Cities With the Hottest Startup Activity

San Diego-Carlsbad-San Marcos

San Diego-Carlsbad-San Marcos
Image credit: sandiegoa | Getty Images

Rank 2016: 11

Rate of new entrepreneurs: 0.49 percent 

Opportunity share of new entrepreneurs : 82.54 percent 

Startup density: 95.9 

10 Cities With the Hottest Startup Activity

Las Vegas-Paradise

Las Vegas-Paradise
Image credit: Chris Sattlberger | Getty Images

Rank 2016: 5

Rate of new entrepreneurs: 0.42 percent 

Opportunity share of new entrepreneurs : 81.93 percent 

Startup density: 120.7

10 Cities With the Hottest Startup Activity

San Antonio-New Braunfels

San Antonio-New Braunfels
Image credit: traveler1116 | Getty Images

Rank 2016: 14

Rate of new entrepreneurs: 0.38 percent 

Opportunity share of new entrepreneurs : 89.97 percent 

Startup density: 87.2

10 Cities With the Hottest Startup Activity

New York-Northern New Jersey-Long Island

New York-Northern New Jersey-Long Island
Image credit: Predrag Vuckovic | Getty Images

Rank 2016: 7

Rate of new entrepreneurs: 0.41 percent 

Opportunity share of new entrepreneurs : 84.43 percent 

Startup density: 86.5

10 Cities With the Hottest Startup Activity

Phoenix-Mesa-Glendale

Phoenix-Mesa-Glendale
Image credit: Matt Mawson | Getty Images

Rank 2016: 10

Rate of new entrepreneurs: 0.38 percent 

Opportunity share of new entrepreneurs : 87.15 percent 

Startup density: 92.1 

10 Cities With the Hottest Startup Activity

Houston-Sugar Land-Baytown

Houston-Sugar Land-Baytown
Image credit: Shobeir Ansari | Getty Images

Rank 2016: 6

Rate of new entrepreneurs: 0.40 percent 

Opportunity share of new entrepreneurs : 81.93 percent 

Startup density: 92.6

10 Cities With the Hottest Startup Activity

Denver-Aurora-Broomfield

Denver-Aurora-Broomfield
Image credit: gcosoveanu | Getty Images

Rank 2016: 8

Rate of new entrepreneurs: 0.39 percent 

Opportunity share of new entrepreneurs : 82.87 percent 

Startup density: 92.3

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  • 10 Cities With the Hottest Startup Activity
  • 1. Miami-Fort Lauderdale-Pompano Beach
  • 2. Austin-Round Rock-San Marcos
  • 3. Los Angeles-Long Beach-Santa Ana
  • 4. San Diego-Carlsbad-San Marcos
  • 5. Las Vegas-Paradise
  • 6. San Antonio-New Braunfels
  • 7. New York-Northern New Jersey-Long Island
  • 8. Phoenix-Mesa-Glendale
  • 9. Houston-Sugar Land-Baytown
  • 10. Denver-Aurora-Broomfield
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