The 5 Best Cities for Startups

Silicon Valley is often the first name that comes to mind when listing the best areas for startups, but many U.S. cities also provide a thriving atmosphere for young companies. Factors such as proximity to universities, availability of venture capital, a small-business friendly environment, and a strong economy are some of the many characteristics favorable to startups. Here's a look at five great cities for startups and reasons why they're so entrepreneur-friendly.

1. Boulder, Colorado

With the stunning beauty of the Rocky Mountains serving as a backdrop, Boulder is consistently included in lists of top U. S. cities for startups. In a recent compilation by Entrepreneur.com, Boulder ranked as the city with the highest ratio of tech startups in the nation, building on its history of all-around small business success. Well-known companies like Celestial Seasonings and Crocs originated in Boulder. The community also topped Bloomberg.com's list of best places for startups due to the number of patents awarded per resident, the local university providing exceptional talent and research labs such as Techstars in the city which serve as sources of talent and funding.

2. Austin, TX

Population-wise, Austin is one of the country's fastest growing cities due in part to affordable real estate and a strong job market. It's also one of the top cities for tech funding with serious tech history thanks to the presence of a company like Dell, research labs, and entrepreneur development programs. The current booming startup scene in this town includes networking events like the Austin Startup Games and the South by Southwest Interactive tech festival. Capital Factory and Techstars are two the many great startup resources for entrepreneurs.

3. DC / Baltimore Metro Area

The wide university network in the DC / Baltimore area feeds a high level of talent to this region. The city of Baltimore is home to successful startups like Under Armour and Advertising.com. The city also hosts a business incubator that has assisted 350 companies and delivered $1.6 billion in startup investment over a 15 year period. Nearby DC also ranks ninth in the U.S. for cities attracting the most tech startup funding, and the metro area comes in at number 8 on the list of cities with the highest ratio of startup businesses.

4. Seattle

Seattle is also a top city for tech funding with an above-average ratio of startups. The home of Microsoft and Amazon attracts legions of talent that shape the area's overall employee pool, and has enticed other tech giants like Google, Facebook, and Twitter to open engineering offices in the city. Some of the startup incubators in the city include TechStars and Microsoft Ventures, which offers a mentor-driven program for entrepreneurs.

5. New York City

Even when the high cost of living is taken into account, NYC is still one of the best cities for startups. Over the past decade, the city has become a hotbed of startup talent with successes like Tumblr, Etsy, and Shutterstock. Today, the city hosts more fast-growing companies than any other in a variety of industries.

Although the largest United States cities are known for their well-established business centers, those looking to start a new business venture should also consider smaller metro areas, which can provide a less competitive climate and access to unique resources and talent. Favorable tax laws and a strong local economy are also important factors to consider prior to selecting a location to launch a startup.