The 50 Best U.S. Cities for Starting a Business in 2020
Thinking About A New Start? Look into these cities! Below we have the top cities for starting a business in 2020!
Austin
No. 3 Population GrowthNo. 27 Net Business CreationNo. 4 Early-Stage Funding Deals
Austin’s population and job gains are staggering--thanks largely to the high-growth companies that made the city tops on Inc.'s per capita list. The Texas capital used to lag in startup funding--now, it's fourth in early-stage deals and has begun minting unicorns. In October, the energy-jobs platform RigUp raised $300 million in a round led by Andreessen Horowitz at a $1.9 billion valuation. Consumer products companies like Yeti Coolers and jeweler Kendra Scott have blown up, and so has the food and beverage scene. Siete Family Foods, a maker of healthy Mexican-food items, raised $90 million this past February and then proceeded to triple its nationwide distribution to some 13,000 stores. “Austin is one of the few markets that is able to support a full range of kinds of startups--like Silicon Valley or New York,” says Joshua Baer, the founder of Capital Factory, the city’s dominant startup incubator. “It's because we have a diverse set of strengths in our background.” He points to homegrown successes like Dell, Indeed, and Whole Foods, whose alums have started their own businesses in related fields.
Salt Lake City
No. 1 High-Growth Company Density No. 1 Job Creation No. 3 Population Growth
Yes, the scenery is stunning, but so are Salt Lake's bona fides. In 2018, area cloud software maker Domo raised $193 million in its public offering, while survey software maker Qualtrics sold to SAP for $8 billion. These exits and IPOs have inspired a slew of startups--including communications software company Weave, which raised $70 million at a $970 million valuation in October, and Divvy, an expense and budgeting platform, which raised $200 million Series C funding earlier this year. Meanwhile, even as wages are increasing, Salt Lake City housing remains more affordable than that of other major tech hubs such as San Francisco and Seattle. “The active, business-friendly culture is what draws people here,” says David Wright, co-founder and CEO of Pattern, a Lehi-based adtech company that booked $211 million in revenue in 2018 and landed at No. 404 on the 2019 Inc. 5000. The "tight-knit community” is what keeps them here, he adds.
Durham
No. 3 High-Growth Company Density No. 8 Net Business Creation No. 10 Job Creation
Downtown Durham was an eyesore after its tobacco factories closed in the 1980s. Today, the North Carolina hub has been rebuilt, with shops, offices, and co-working spaces revitalizing the entire city. Tech companies flock here in part for the low rent: at $26.87 per square foot of commercial space, it’s a fraction of what you’ll find in places like New York City or San Francisco. Durham has one of the highest rates of entrepreneurship per capita in the country, and while a chunk of the city’s funding comes from big banks that tend to be risk-averse, the area has seen an uptick in access to early-stage capital thanks to younger firms like Bull City Ventures and Triangle Angel Partners. Co-working space American Underground, which offers mentorship and networking programs, recently opened a fourth Durham location and houses more than 250 startups in total. The city’s startups span a wide range of industries, but there are a large number of software and and science startups, such as therapeutics upstart Ribometrix, which recently earned a $20 million investment, and biotech firm Baebies, which has secured $19 million to date. Just down the road from Durham is Raleigh, and the two cities feed off each other’s highly talented, hyper-educated workforces, which include a high number of Duke, UNC-Chapel Hill, and NC State graduates. All three universities have strong entrepreneurship programs and investment funds through which alumni can invest in students’ businesses.
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