Best Places to Live

2016 Best Cities for Entrepreneurs

What makes a city a great place for entrepreneurs? To be way too broad: A lot of things. And a lot of different things than we normally look at when deciding our top 10s and top 100s. We know that you can never totally separate a place into where you live and work, but usually our rankings tilt toward the quality-of-life side of things.

When Entrepreneur magazine came to us, asking if we could assist them in finding the 50 Best Cities for Entrepreneurs, we consulted our friends at our economic development team at Livability. We talked about how great places to live attract great people and attract the businesses that want to hire them. All of these things are inarguably related. We dipped into our database and pulled out both economic indicators and quality of life indicators to create a ranking of great places to start a business -- in places workers will want to live.

We analyzed 17 economic indicators for more than 2,200 cities with populations greater than 20,000. These included: the growth in businesses and employees from 2011-2015; the city's unemployment rate; the number of venture capital deals in the past 10 years; the city's business tax rate; how much funding business owners received from SBA and 7(a) loans; the percentage of college-educated locals; the accessibility to high-speed broadband; projected household income growth between 2015-2020; and how much money residents spend within their community, as opposed to outside of it.

Of course, we also included our LivScore (which measures livability, see the full methodology for each city). That score is the distillation of 45 factors including further economic measures as well as amenities, demographics, infrastructure and more. Together this becomes more than just a business list. It factors in both sides of the coin. These are 50 great cities to start a business, and to live in while it grows and thrives.

  • 21

    Sioux Falls, SD

    Population: 164,341
    Courtesy of visitsiouxfalls.com

    South Dakota entrepreneurship is on the rise, and no more so than in Sioux Falls, the largest city in the state. Thanks to the recent addition of a new angel fund, Falls Angel Fund LLC, startup culture looks to continue to grow in this Midwest city.

    Business Growth (2011-2015): 7%

    Employment Growth (2011-2015): 4%

  • 22

    Seattle , WA

    Population: 653,017

    Courtesy of Jonathan Miske under a CC 4.0 license.

    Mention “Seattle startup,” and the first thing that comes to most people’s minds is Starbucks. But aside from a slew of other renowned coffee brands (Tully’s Coffee, Espresso Vivace, and Caffé Vita Coffee Roasting Company), Seattle is also a major tech hub in the U.S., causing some to wonder if it’s Silicon Valley’s “next favorite stop.”

    Business Growth (2011-2015): 10%

    Employment Growth (2011-2015): 9%

  • 23

    Lawrence, KS

    Population: 91,305
    Lawrence Convention & Visitors Bureau

    Lawrence is a combination of all things right for entrepreneurs: It’s a centrally-located smaller city, just 30 minutes away from a big metro (Kansas City); it has easy access to major highways, airports and railways; and it’s home to a major research university (the University of Kansas), providing the area with a highly-educated workforce.

    Business Growth (2011-2015): 27%

    Employment Growth (2011-2015): 16%

  • 24

    Washington , DC

    Population: 647,484

    Courtesy of PeterPanFan under a CC 4.0 license.

    Aside from what House of Cards will have you believe, D.C. is not all politics; it also has an incredible startup scene. While you might not recognize the brands as quickly as you would in Austin or Seattle, D.C.’s entrepreneurs are paving the way for our next generation of America’s business leaders.

    Business Growth (2011-2015): 8%

    Employment Growth (2011-2015): 10%

  • 25

    Grand Rapids , MI

    Population: 192,416
    Experience Grand Rapids

    One of the coolest features of the Grand Rapids startup scene is The Start Garden, a combination incubator and venture capital fund. The city is also home to two new accelerators, Emerge Xcelerate and Seamless, and some of the best breweries in the country, which is why we've named it one of the Best Beer Cities in the U.S. two years in row. 

    Business Growth (2011-2015): 12%

    Employment Growth (2011-2015): -4%

  • 26

    Denton, TX

    Population: 125,734
    Photo by Stephen Masker

    As one writer points out, five years ago, Denton had no tech scene. But like all things in the tech world, overnight it has seemingly become one of the hottest tech startup scenes in the US. Why? A variety of ways to find funding, workspace, and other entrepreneurs, plus the influence of University of North Texas and its Innovation Greenhouse.

    Business Growth (2011-2015): 10%

    Employment Growth (2011-2015): 6%

  • 27

    Omaha, NE

    Population: 440,034

    Courtesy of Bradley Weber under a CC 2.0 license.

    According to the Greater Omaha Chamber, Nebraska’s largest city is home to some of the best high tech/high growth startups in the Midwest. Major industries, here, include agribusiness, e-commerce, financial services, and software-as-a-service.  

    Business Growth (2011-2015): 7%

    Employment Growth (2011-2015): 14%

  • 28

    Portland, OR

    Population: 612,206
    Brian McCord

    Like nearby Seattle, Portland has become a major tech hub in the U.S., with Microsoft, Intel, eBay, and IBM all having offices in this oft-considered “weird” Oregon city. As a result, the tech startup scene is booming, though more so with platform plays, not consumer-facing brands, as one commentator pointed out.  

    Business Growth (2011-2015): 14%

    Employment Growth (2011-2015): 5%

  • 29

    Newport, RI

    Population: 24,459
    Courtesy of D. Reinhart

    Most of the time when you hear of Newport it’s for one of three things: sailing, the mansions, or the Newport Folk Festival. But this small coastal city is also becoming a hotbed for startups, with 125 SBA loans and more than $13 million granted to their small businesses in the past five years.

    Business Growth (2011-2015): 12%

    Employment Growth (2011-2015): 7%

  • 30

    Bloomington, IN

    Population: 82,813
    Courtesy of Visit Bloomington

    Another city (like #1 Boulder, CO) that seems to be the perfect storm of factors to aid in small business growth. With a rapidly growing tech sector, a low cost of living, and Indiana University’s top-rated entrepreneurship program providing a highly-educated workforce, it’s almost a no brainer to launch a startup here.

    Business Growth (2011-2015): 10%

    Employment Growth (2011-2015): 67%