10 Best States for Launching Your Startup

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It takes a special someone to dive into the world of startup businesses. In addition to having a strong vision for your dream company, you’ve got to be willing to take a risk. You’ll almost certainly need some saved capital and a good sense of how to delve into the world of juggling your own finances. And don’t forget the joy of dealing with the taxman.

Still ready to take the plunge? You can launch a startup almost anywhere — just ask Mark Zuckerberg, who legend says built Facebook in his Harvard dorm room. But it’s true that certain states are more friendly to startup businesses. To determine which ones, career website Zippia built an index using data from PricewaterhouseCoopers’ Q2 2018 MoneyTree Report and The Kauffman Index, a leading indicator of U.S. business creation. Zippia ranked states by criteria found in the reports, including the number of deals done to fund startup businesses, deals done per capita and startup funding per capita.

Here are the top 10 startup-friendly states, starting with No. 10. For more good locations for entrepreneurs, check out 25 best U.S. cities to be your own boss.

10. Texas

Longhorns on parade in Dallas-Fort Worth
Chris DeRidder and Hans VandenNieuwendijk / Shutterstock.com

The stars at night are big and bright, deep in the heart of Texas. The deals there are big, too. The Lone Star State was home to 68 startup deals in the second quarter of 2018, with $606 million spent on funding.

9. Oregon

Bridge over Willamette River, Oregon
JPL Designs / Shutterstock.com

Go West, young man or woman, to picturesque Oregon, and build your startup among the rivers and roses of the Beaver State. Oregon saw just 18 startup deals in Q2 2018, but they were well-funded, with around $390 million poured into those 18 deals.

8. Maryland

Baltimore, Maryland
sean-pavone / Shutterstock.com

Maryland has a relatively small population, but the Old Line State saw 23 startup deals funded, with funding of more than $247 million in Q2 2018.

7. Virginia

f11photo / Shutterstock.com

Scenic Virginia no doubt benefits from being close to the nation’s capital. The state saw 25 startup deals funded in Q2 2018, to the tune of more than $204 million.

6. Utah

Utah
f11photo / Shutterstock.com

Surprised to see Utah on this list? It’s relatively small — the state only has 2.9 million people — but Q2 of 2018 saw 15 startup deals funded for almost $187 million. Don’t be surprised — the Beehive State’s motto is “Industry,” referring to the hard work and determination of those Utah early pioneers.

5. New York

Pavel Elias / Shutterstock.com

It’s up to you, New York, New York. The Empire State comes in at No. 5, with 189 startup deals funded, and $2.7 billion dollars spent to fund them. New York is the Big Apple, and plenty of entrepreneurs can take a bite.

4. Washington

Pike Place Market at night.
Carter / Shutterstock.com

From A (Amazon) to Z (Zillow), the companies based in Washington state, particularly the Seattle area, are varied and diverse. The second quarter of 2018 saw 51 startup deals funded, to the tune of more than $768 million. Microsoft isn’t the only game in Seattle any more, if it ever was.

3. Colorado

Jeff Zehnder / Shutterstock.com

Ski bums and scientists alike flock to mountainous Colorado, for its climate, leisure activities, cultural advantages and more. It’s a prime zone for the startup-minded. Colorado saw 41 startups founded in Q2 of 2018, with almost $448 million invested.

2. California

Hollywood Boulevard in LA.
Sean Pavone / Shutterstock.com

Thought you’d see California, home of legendary startup incubator Silicon Valley, at No. 1? Close, but not quite. The Golden State landed at No. 2, topping the list for the absolute most startup deals, at 586, with a total of $12.1 billion invested. No surprise, considering that the state’s population is 38 million, more people than in all of Canada.

1. Massachusetts

Boston, Massachusetts
Roman Babakin / Shutterstock.com

Mark Zuckerberg couldn’t have picked a better state to start Facebook than Harvard’s home, Massachusetts. Zippia crowned the Bay State the No.1 state for startups, thanks in large part to the fact that the 113 startups there in Q2 2018 received a total of $2.8 billion in funds to begin operations.

Are you involved in a startup? Share your experiences and thoughts in comments below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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