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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.

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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.

 
roberto bowyer | Getty Images

Miami-Fort Lauderdale-Pompano Beach

Rank 2016: 2

Rate of new entrepreneurs: 0.56 percent 

Opportunity share of new entrepreneurs : 81.09 percent 

Startup density: 107.8

John Cabuena Flipintex Fotod | Getty Images

Austin-Round Rock-San Marcos

Rank 2016: 1

Rate of new entrepreneurs: 0.51 percent 

Opportunity share of new entrepreneurs : 84.73 percent 

Startup density: 104.5

Daniel Viñé Garcia | Getty Images

Los Angeles-Long Beach-Santa Ana

Rank 2016: 3

Rate of new entrepreneurs: 0.56 percent 

Opportunity share of new entrepreneurs : 80.03 percent 

Startup density: 92.3

sandiegoa | Getty Images

San Diego-Carlsbad-San Marcos

Rank 2016: 11

Rate of new entrepreneurs: 0.49 percent 

Opportunity share of new entrepreneurs : 82.54 percent 

Startup density: 95.9 

Chris Sattlberger | Getty Images

Las Vegas-Paradise

Rank 2016: 5

Rate of new entrepreneurs: 0.42 percent 

Opportunity share of new entrepreneurs : 81.93 percent 

Startup density: 120.7

traveler1116 | Getty Images

San Antonio-New Braunfels

Rank 2016: 14

Rate of new entrepreneurs: 0.38 percent 

Opportunity share of new entrepreneurs : 89.97 percent 

Startup density: 87.2

Predrag Vuckovic | Getty Images

New York-Northern New Jersey-Long Island

Rank 2016: 7

Rate of new entrepreneurs: 0.41 percent 

Opportunity share of new entrepreneurs : 84.43 percent 

Startup density: 86.5

Matt Mawson | Getty Images

Phoenix-Mesa-Glendale

Rank 2016: 10

Rate of new entrepreneurs: 0.38 percent 

Opportunity share of new entrepreneurs : 87.15 percent 

Startup density: 92.1 

Shobeir Ansari | Getty Images

Houston-Sugar Land-Baytown

Rank 2016: 6

Rate of new entrepreneurs: 0.40 percent 

Opportunity share of new entrepreneurs : 81.93 percent 

Startup density: 92.6

gcosoveanu | Getty Images

Denver-Aurora-Broomfield

Rank 2016: 8

Rate of new entrepreneurs: 0.39 percent 

Opportunity share of new entrepreneurs : 82.87 percent 

Startup density: 92.3