Business Administration

The Best Startup Hubs in the US

The Best Startup Hubs in the US
Inc. magazine recently rated Austin its top location in which to start a business. Image from Pixabay
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Leo Maurer May 23, 2022

Startups emeree wherever there are good ideas and the capital to launch them. However, some locations are especially conducive startup ecosystems. This article profiles the top startup hubs.

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The Silicon Valley in the southern San Francisco bay area has been a hotbed for US startups for many decades. Only a few states like New York and Massachusetts rivaled San Francisco—with exceptional talent pipelines and venture capitalist funding—in maintaining a supportive startup environment. However, the landscape has shifted over the last few years.

Several Western cities around the world—among them London, Stockholm, Vancouver, Paris, Toronto, Tel Aviv, Berlin, and Amsterdam—have emerged as major players on the startup scene by creating environments that encourage startup growth. In Asia, Bangalore—sometimes referred to as India’s Silicon Valley—and Singapore saw a quick rise of tech and service-oriented startups.

Despite the many other countries luring entrepreneurs, the United States remains the largest global market for VC funding. It occupies the center of the startup ecosystem, with many tech entrepreneurs, innovative early-stage startups, and e-commerce company owners choosing United States cities as their primary location for business.

Which cities? With rapidly growing infrastructure and a highly skilled workforce, many locations are nurturing startups at rates similar to California’s. While entrepreneurs often move to other states for various reasons, many are attracted by the lower cost of living and attractive tax breaks.

Read on to learn about 11 top startup hubs in the US in 2022, and what makes these locations the best places to start a business.

11 Best Startup Hubs in the US

Atlanta, GA

Georgia offers entrepreneurs a stable banking system, low taxes, and a convenient business registration process. Georgia is also renowned for its many minority-owned businesses; in fact, Georgia has seen the highest percentage of venture capital funding going to black startup founders since 2016. Additionally, initiatives like the Atlanta Tech Village have fostered a supportive breeding ground for over 300 local startups. Startups in Atlanta also enjoy access to exceptional talent from nearby universities Emory University, Georgia Institute of Technology, and the Atlanta University Center Consortium.

Austin, TX

The Opportunity Austin initiative, sponsored by the city’s Chamber of Commerce, has provided a substantial boost to regional startup activity. The program helps businesses boost visibility by connecting them with foreign investors and local business partners. The organization claims the program has created over 400,000 jobs in the area since 2004.

Texas is one of the six U.S states that do not levy corporate tax on businesses. Unsurprisingly, many companies, including Google, Amazon, SpaceX, Apple, Tesla, Canva, Facebook, and Oracle, have moved to Austin to benefit from the state’s attractive tax policies. Texas also has the highest number of net domestic migrants in the country, ensuring that startups in Austin can access a large and diverse customer base. Additionally, Texas stands out as the second-largest economy in the US, reporting a $1.99 trillion gross domestic product in 2021. Inc. magazine recently rated Austin its top location in which to start a business.

Boston, MA

Boston is well-known for innovations in cleantech, biotech, healthcare, life sciences, and robotics. The city also boasts a progressive startup climate, with women-led startups receiving three times the financial support as the national average. Phenomenal talent pipelines and outstanding venture capital funding prospects help drive Boston’s startup ecosystem. In the first half of 2021 alone, Massachusetts startups raised $17.4 billion in venture capitalist funding.

Boston is home to world-renowned universities, including (but hardly limited to) Harvard and Massachusetts Institute of Technology. Harvard’s Innovation Labs and MIT’s Schwarzman College of Computing have a history of producing tech founders. In short, Boston is indeed a bustling startup paradise.

As Mark Zuckerberg put it: “In Silicon Valley, you get this feeling that you have to be out here. But it is not the only place to be. If I was starting now, I would’ve stayed in Boston.”

Chicago, IL

Last year, Chicago startups raised $7 billion in VC funding, seven times more than in 2020. Apart from great VC prospects, Chicago’s startups also benefit heavily from access to more than 60 colleges and universities in the region. Home to 6,151 tech companies and the highest percentage (34 percent) of women-owned startups globally, Chicago offers a truly hospitable environment for new startups.

Denver, CO

Inc. magazine recently ranked Denver eighth among its best places to start a business. The city currently hosts more than 1,000 active startups. The Denver Startup Week is one of the largest startup programs in the nation; it helps founders meet and pitch ideas to investors.

Additionally, Denver’s startup scene has received tremendous support from the state government in the form of the Colorado Innovation Network. The initiative provides exceptional resources to upcoming businesses through partnerships with research institutions, entrepreneurs, universities, and industry experts.

Los Angeles, CA

Home to startups such as Huli, Snapchat, Tinder, LegalZoom, and Activision, Los Angeles has a vibrant history of entrepreneurship. Even now, the city dominates as one of the best places for entrepreneurs to chase their dreams. Over 1,500 tech businesses operate from the Silicon Beach section in LA. With over 4,000 venture-backed startups in the city, Los Angeles is the third-largest startup ecosystem in the country (behind only San Francisco and New York City). Blockchain technology has been a significant driver of growth, with a year-over-year 188 percent increase in VC-backed blockchain deals in 2021. Additionally, talent pipelines to prestigious universities like Caltech and UCLA make recruiting exceptional talent easier for businesses.

New York, NY

New York has the largest concentration of Fortune 500 companies in the US. Additionally, New York is the largest US city to recognize LGBTQ+-owned businesses as minority-owned businesses, making LGBTQ+-owned companies eligible for millions in business support services. A new initiative by the NYC Department of Small Business Services (SBS) that aims to eliminate red tape to start small businesses in the city has also given a boost to the New York City startup ecosystem. Other government initiatives such as START-UP NY allows eligible businesses to operate tax-free for ten years on or near eligible universities or campuses in New York.

San Diego, CA

San Diego owes its popularity among entrepreneurs primarily to the city’s strong economy, robust government incentives, and large-scale startup events. The Hera Venture Summit, the San Diego Angel Conference, and USCD Ignite have created a supportive environment for startups. The city currently houses 24 incubators and accelerator programs for businesses.

In terms of government support, San Diego’s Economic Development Department helps key businesses in targeted industries with project advocacy, expedited permit review, and cost reimbursement programs. Additionally, research and educational institutions like the University of San Diego and the University of California, San Diego, provide strong talent for local startups in the city.

Seattle, WA

In just a few years, Seattle has created a vibrant startup ecosystem—apparently being home to Microsoft and Amazon wasn’t enough for this Northwest city. The city highly encourages entrepreneurial spirit with programs like Venture Out, helping tech workers quit their jobs and start their own companies. In addition, Seattle’s startups raised a record-breaking $3.1 billion in funding in 2021. The region added over 48,000 tech jobs between 2016 and 2020. The University of Washington, a leader in the field of big data and machine learning, provides exceptional talent to Seattle’s AI and analytics sector.

Silicon Valley, CA

Apart from Silicon Valley’s reputation, other factors make the region startup heaven. Silicon Valley’s policies and regulations safeguard businesses, interests, intellectual property, and trade secrets. The region attracted a whopping $247 billion in venture capital funding from 2017 to 2021.

Stanford University provides a major talent and recruiting pipeline to Silicon Valley by producing unicorn startups and innovative graduates, thanks in part to the school’s practical teaching approach, research opportunities, and startup mentors. With many high-tech firms and programmers choosing Silicon Valley, it is one of the leading tech hubs in the United States. The university’s alumni generate an estimated $3 trillion in economic impact each year.

Washington DC

The Kauffman Foundation ranked Washington DC first in the nation in its most recent metro-area Growth Entrepreneurship Index. The city’s large skilled workforce factors substantially in the ranking; Washington DC ranks third among the nation’s most-educated cities (behind San Jose and Ann Arbor). DC’s municipal government offers substantial benefits to startups. Initiatives like #innoMAYtion seek to nurture Washington DC’s entrepreneurial spirit by helping businesses solve the city’s problems.


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Preparing to launch your own business

If you are preparing to launch your own business in the US, it is worth watching the cities listed before. However, keep in mind that although startup ecosystems might seem similar across various cities, there are crucial differences among cities that can support or harm your business growth. You should research extensively before choosing the city in which to build your business.

(Last Updated on February 26, 2024)

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About the Editor

Tom Meltzer spent over 20 years writing and teaching for The Princeton Review, where he was lead author of the company's popular guide to colleges, before joining Noodle.

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