15 Cities With the Most Minority-Owned Startups

Advertising Disclosure: When you buy something by clicking links on our site, we may earn a small commission, but it never affects the products or services we recommend.

minority business owner
Rawpixel.com / Shutterstock.com

This story originally appeared on Self.

In addition to being a critical driver of growth in the economy overall, entrepreneurship is one of the many ways that individuals can build wealth in America. But as 2020 illustrated, opportunities to participate and succeed in the entrepreneurial economy are not equally distributed by race and ethnicity.

Last year, a wave of racial justice protests nationwide and the economic repercussions of the COVID-19 pandemic drew more attention to the struggles that minority communities face in building and sustaining wealth. According to a McKinsey analysis, two of the primary challenges facing minority business owners are structural barriers to financial health and disproportionate representation in industries most susceptible to economic shocks like those presented by COVID-19.

Despite all these challenges, today there are nearly 170,000 minority-owned startups in the U.S., employing over 700,000 people and generating close to $100 billion in annual revenue. Based on demographic trends, these numbers are likely to grow as the population continues to diversify on racial and ethnic lines. Unsurprisingly, states with higher minority populations — including “majority-minority” California and Hawaii — also lead in the percentage of startups that are minority-owned.

At the city level, the story is much the same. While areas with large minority populations also tend to have higher concentrations of minority-owned startups, minorities remain underrepresented in small-business ownership relative to their population levels. To show this trend, researchers at Self Financial used U.S. Census Bureau data to calculate the percentage of startup businesses — defined as firms less than 2 years old — that are minority-owned and the minority population share in each metro area. Researchers also included each metro’s total number of minority-owned startups, along with their number of employees and total annual sales.

Keep reading for the large metros with the most minority-owned startups.

15. Richmond, VA

Richmond, Virginia
ESB Professional / Shutterstock.com
  • Percentage of startups that are minority-owned: 19.56%
  • Number of startups that are minority-owned: 617
  • Total employees at minority-owned startups: 2,976
  • Annual sales at minority-owned startups: $260,076,000
  • Minority population share: 42.71%

14. Chicago-Naperville-Elgin, IL-IN-WI

Chicago skyline
Dream Master / Shutterstock.com
  • Percentage of startups that are minority-owned: 20.37%
  • Number of startups that are minority-owned: 5,275
  • Total employees at minority-owned startups: 19,635
  • Annual sales at minority-owned startups: $2,785,820,000
  • Minority population share: 47.10%

13. Baltimore-Columbia-Towson, MD

Baltimore, Maryland
sean-pavone / Shutterstock.com
  • Percentage of startups that are minority-owned: 22.39%
  • Number of startups that are minority-owned: 1,460
  • Total employees at minority-owned startups: 5,053
  • Annual sales at minority-owned startups: $764,077,000
  • Minority population share: 43.45%

12. Seattle-Tacoma-Bellevue, WA

Seattle
Albert Pegp / Shutterstock.com
  • Percentage of startups that are minority-owned: 22.66%
  • Number of startups that are minority-owned: 2,937
  • Total employees at minority-owned startups: 13,133
  • Annual sales at minority-owned startups: $1,576,032,000
  • Minority population share: 36.72%

11. Las Vegas-Henderson-Paradise, NV

Las Vegas homes
trekandshoot / Shutterstock.com
  • Percentage of startups that are minority-owned: 23.80%
  • Number of startups that are minority-owned: 1,624
  • Total employees at minority-owned startups: 5,946
  • Annual sales at minority-owned startups: $926,653,000
  • Minority population share: 57.23%

10. Orlando-Kissimmee-Sanford, FL

Orlando, Florida
Sean Pavone / Shutterstock.com
  • Percentage of startups that are minority-owned: 23.89%
  • Number of startups that are minority-owned: 2,279
  • Total employees at minority-owned startups: 6,472
  • Annual sales at minority-owned startups: $920,034,000
  • Minority population share: 53.32%

9. Dallas-Fort Worth-Arlington, TX

Aneese / Shutterstock.com
  • Percentage of startups that are minority-owned: 24.12%
  • Number of startups that are minority-owned: 5,190
  • Total employees at minority-owned startups: 25,714
  • Annual sales at minority-owned startups: $3,382,747,000
  • Minority population share: 53.97%

8. St. Louis, MO-IL

St. Louis, Missouri
f11photo / Shutterstock.com
  • Percentage of startups that are minority-owned: 25.03%
  • Number of startups that are minority-owned: 2,279
  • Total employees at minority-owned startups: 4,019
  • Annual sales at minority-owned startups: $193,558,000
  • Minority population share: 26.27%

7. Washington-Arlington-Alexandria, DC-VA-MD-WV

Washington, D.C.
orhan-cam / Shutterstock.com
  • Percentage of startups that are minority-owned: 29.23%
  • Number of startups that are minority-owned: 4,599
  • Total employees at minority-owned startups: 16,729
  • Annual sales at minority-owned startups: $2,480,180,000
  • Minority population share: 54.50%

6. New York-Newark-Jersey City, NY-NJ-PA

NYC New York City skyline at night
Songquan Deng / Shutterstock.com
  • Percentage of startups that are minority-owned: 29.93%
  • Number of startups that are minority-owned: 22,544
  • Total employees at minority-owned startups: 67,660
  • Annual sales at minority-owned startups: $11,803,829,000
  • Minority population share: 54.14%

5. Houston-The Woodlands-Sugar Land, TX

Houston, Texas skyline
Silvio Ligutti / Shutterstock.com
  • Percentage of startups that are minority-owned: 30.45%
  • Number of startups that are minority-owned: 5,599
  • Total employees at minority-owned startups: 22,735
  • Annual sales at minority-owned startups: $3,145,123,000
  • Minority population share: 63.85%

4. San Antonio-New Braunfels, TX

San Antonio at night.
f11 photo / Shutterstock.com
  • Percentage of startups that are minority-owned: 30.86%
  • Number of startups that are minority-owned: 1,675
  • Total employees at minority-owned startups: 8,871
  • Annual sales at minority-owned startups: $1,076,705,000
  • Minority population share: 66.32%

3. Riverside-San Bernardino-Ontario, CA

Riverside, California at night
MattGush / Shutterstock.com
  • Percentage of startups that are minority-owned: 34.07%
  • Number of startups that are minority-owned: 3,540
  • Total employees at minority-owned startups: 19,527
  • Annual sales at minority-owned startups: $2,013,083,000
  • Minority population share: 67.88%

2. Los Angeles-Long Beach-Anaheim, CA

The streets of Los Angeles, where median rent is relatively low
Sean Pavone / Shutterstock.com
  • Percentage of startups that are minority-owned: 34.70%
  • Number of startups that are minority-owned: 17,221
  • Total employees at minority-owned startups: 69,107
  • Annual sales at minority-owned startups: $11,788,812,000
  • Minority population share: 70.36%

1. San Jose-Sunnyvale-Santa Clara, CA

San Jose California
Uladzik Kryhin / Shutterstock.com
  • Percentage of startups that are minority-owned: 46.01%
  • Number of startups that are minority-owned: 2,796
  • Total employees at minority-owned startups: 11,469
  • Annual sales at minority-owned startups: $1,808,320,000
  • Minority population share: 68.38%

Detailed Findings & Methodology

a man reads his free credit report
ESB Professional / Shutterstock.com

The data used in this analysis is from the U.S. Census Bureau’s Annual Business Survey, which includes all U.S. businesses with paid employees. To identify the locations with the most minority-owned startup businesses, researchers calculated the percentage of all startup businesses (firms less than 2 years old) that are minority-owned. The researchers also calculated the minority population share of each geographic region (defined as the percentage of the total population that does not identify as non-Hispanic white) by using data from the U.S. Census Bureau’s 2019 American Community Survey.

To improve relevance, only metropolitan areas with at least 100,000 residents were included. Additionally, metros were grouped into cohorts based on population size: small (100,000–349,999), midsize (350,000–999,999), and large (1 million or more).

Get smarter with your money!

Want the best money-news and tips to help you make more and spend less? Then sign up for the free Money Talks Newsletter to receive daily updates of personal finance news and advice, delivered straight to your inbox. Sign up for our free newsletter today.