Business.org ranked the top cities for startups and entrepreneurs based on number of companies, education levels, housing costs, and more.
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- San Francisco, Austin, and Minneapolis are the top cities for startups in the US. -- Business.org, 2018
- The top US cities for startups and entrepreneurs are also home to many major tech companies like Google. -- Business.org, 2018
Many of the cities atop Business.org's ranking of the top towns for entrepreneurs and startups are obvious mainstays, yet the list is peppered with unexpectedly competitive locales. San Francisco and San Jose took the first and fourth spot respectively, due in no small part to their proximity to Silicon Valley and preeminence within the tech world.
But other cities are capitalizing off of the sky high cost of living in the Bay Area and have been able to siphon off businesses looking for more affordable locations with similarly educated local populations.
Business.org assembled the list based on a series of criteria including the number of startups, local education levels, rent/housing costs, and local joblessness.
Austin, coming in at no. 2 after San Francisco, made a strong case for being one of America's premiere entrepreneurial cities of the future.
"Austin is loaded with educated millennials who enjoy the city's vibrant arts and dining scene--but at a lower cost-of-living price tag (nearly half of San Francisco's)," according to the report.
Austin startups are also making a concerted effort to diversify their workforces in an effort to attract young, educated employees. The cost of living also makes it an ideal place to start a business.
In addition to the 5,500 startups in the Texas city, major companies like Google, Facebook, and Apple have set up shop there as well.
SEE: Moving from startup to established company: Four big shifts (Tech Pro Research)
Right below Austin on the list is Minneapolis, which received similar praise for its low housing costs, young and educated population, and booming startup growth.
With an extraordinary 121.3% startup rate, which was higher than anyone else on the list, Minneapolis and its sister city of St. Paul seem primed to move up the list as the decade heads toward a close. Business.org also highlighted that the pay in the tech industry in Minnesota is twice that of any other industry in the state.
The ever-growing capital of Ohio, Columbus, made its way to fifth on the list, buoyed by a $277 million Smart City grant to shore up the city's infrastructure. The highly affordable city also has a plethora of young, educated citizens, and a rising startup growth rate.
SEE: How the 'PayPal Mafia' redefined success in Silicon Valley (TechRepublic cover story) | download the PDF version
Rounding out the list are cities like Boston (which would have been ranked higher due to its wealth of universities but struggled with a skyrocketing cost of living figure), Portland, and Nashville.
Seattle, already home to many of America's most well-known brands such as Microsoft and Amazon, is another key destination named in the list. It fell behind also due to cost of living expenses, which are now almost neck-and-neck with San Francisco.
Denver was able to snag the final spot on the list and is a trendy pick to move up in the future, with a young, educated population and an increasing startup growth rate. The city also benefits from having the lowest unemployment rate on the list.
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