15 Cities With the Most Minority-Owned Startups

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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

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  • 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

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  • 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

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  • 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

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  • 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

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  • 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

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  • 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

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  • 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

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  • 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

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  • 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

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  • 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

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  • 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

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

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  • 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

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  • 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

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  • 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

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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).

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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