By Stephen Moyers
Location matters when founding a startup. The location an entrepreneur chooses can create meaningful business partnerships with local government, investors, and accelerators.
In the past, startups flocked to Silicon Valley, New York City, Boston, or Seattle. These cities shared 76% of venture capital money among them in 2017. Today, however, the startup landscape is changing. Entrepreneurs still rely on these heavy hitters, but they are also choosing relative outliers for their business homes. If you’re starting a business, it may be time to pack up and move to one of these six startup-friendly cities.
Columbus, Ohio
The year 2019 is statistically a great year for entrepreneurs. If this is your year to thrive, consider taking your brand to Columbus. The capital of Ohio can be an intriguing place to start a business, thanks to its demographic of college students, low cost of living, inexpensive costs of operating a business, high number of funds, and increase in venture capital deals.
Columbus, Ohio, topped the 2018 list of best cities for startups, according to Forbes and Revolution. The Ohio State University’s Center for Entrepreneurship has promoted innovation and business startups since 2001. One entrepreneur, Tony Franco of SafeChain Financial, managed to raise $3 million in venture capital for his business plan, without any meaningful revenue. He did this while based in Columbus.
Investors repeatedly asked Franco about his plans to move to the coast, but he said he’s staying put. Franco says the benefits Columbus offers go “beyond the marketing hype many cities claim when they say they are startup friendly.” Franco believes the seeds the Center for Entrepreneurship planted 18 years ago are paying off now in the city. Franco’s business won the Rise of the Rest seed fund competition in Columbus in 2017, earning a $100,000 investment.
Investor Steve Case (co-founder of AOL and Revolution) launched Rise of the Rest in 2014 to help fund startups in underserved cities. In the first nine months of 2018, Columbus’ venture capital deals amounted to $250 million. This is more than three times the value for all 12 months of 2017. The uptick in the capital is playing a large role in the city’s suddenly robust startup culture.
Austin, Texas
Austin, Texas, is an up-and-coming metropolis whose eclectic reputation is helping it rise to the top in the startup world. Austin came in first on Inc.’s List of Surge Cities. This list took into account rate of entrepreneurship, population growth, business investment, and other data points to rank the top 50 cities for startups. Many successful companies have relocated to Austin in the past few years, including Outdoor Voices, a New York clothing startup. Apple is also in talks to expand to Austin. Some of the perks include:
- No personal income tax
- Affordable real estate
- More available land to build
Sources were naming Austin a top place for startups back in 2016, calling it a start-up mecca for its thriving culture, supportive buyers, and enormous arts and music scene. Major corporations such as Amazon, Google, Facebook, and Whole Foods have helped put Austin on the map in terms of business culture. Now, smaller startups are taking advantage of the spotlight.
St. Louis, Missouri
The cost of doing business in St. Louis, Missouri, is 8% lower than the national average and 57% lower than in San Francisco. This, among other perks, makes it an excellent choice for startups. St. Louis came in at number two on Forbes’ list. Its three-year venture capital deal count is at 146, with major deals with Benson Hill Biosystems, Essence Group Holdings, Varsity Tutors, and Jane.ai.