Starting a business involves juggling many factors, and while location might not be as critical as it once was due to the rise of remote work, it still plays a significant role in a startup’s success. Some cities go above and beyond in fostering a supportive environment for new ventures, providing access to resources that can make or break a budding company. To uncover the best cities for startups in 2024, CoworkingMag analyzed 108 U.S. cities across key metrics in four categories: support systems, funding availability, operational setup costs and talent availability.
Based on this analysis, here are the top 5 cities that stand out for their vibrant startup ecosystems:
1. San Francisco
San Francisco has long been synonymous with innovation and continues to lead the pack as the top city for startups in 2024. The city boasts the highest number of startups created with 361 new businesses springing up last year alone. Silicon Valley adjacent, San Francisco excels in both support systems and funding availability, ranking first in these critical categories.
The city’s rich network of accelerators and incubators, such as The Mint by BTV and Greylock Edge, provides invaluable resources and mentorship for entrepreneurs across diverse industries.
2. New York
On the East Coast, New York holds its own as a top contender for startups, taking the second spot. Last year the city was home to 203 new startups, benefiting from the highest concentration of venture capital (VC) opportunities, with 68 VC firms ready to invest in the next big idea.
New York also has the most incubators of any U.S. city, providing early-stage startups with affordable office space, expert guidance and extensive networking opportunities. The vibrant, fast-paced environment of New York continues to attract entrepreneurs looking to make their mark.
3. Los Angeles
Coming in third, Los Angeles is proving itself to be a thriving hub for entrepreneurs. While it may not have the same tech-heavy reputation as its northern neighbor, San Francisco, Los Angeles still saw the creation of 68 startups last year alone. The city particularly shines in operational setup costs, which are significantly lower than San Francisco’s, making it a more affordable choice for new businesses.
Los Angeles also ranks third in funding availability, making it a prime destination for entrepreneurs seeking investment opportunities. From Hollywood to Silicon Beach, the city’s diverse economy and sunny climate attract a wide range of startups, from tech innovators to entertainment providers.
4. Seattle
Seattle lands in fourth place, solidifying its reputation as an innovation hub with a strong support system and a highly educated workforce. With 66% of the population holding a bachelor’s degree, Seattle provides startups with access to a deep pool of talent, much of it coming from prestigious institutions like the University of Washington.
The city is also home to tech giants like Amazon and Microsoft, which bolster its funding landscape with 12 venture capital firms in the area. Last year, 36 startups chose Seattle as their home base, drawn by its collaborative environment and lower competition compared to Silicon Valley.
5. Chicago
Chicago rounds out the top five, offering a balanced mix of support systems and funding availability. The city welcomed 34 new startups last year, supported by a solid network of 11 venture capital firms. Chicago’s startup ecosystem is bolstered by 91 coworking spaces and several top-ranked incubators and accelerators, including Portal Innovations, which has been recognized as one of the best in the area.
With its central location, diverse economy, and ample resources for new businesses, Chicago provides a strategic advantage for startups looking to tap into both East and West Coast markets.
Following the top five cities, the next five contenders on CoworkingMag’s list each bring unique strengths and opportunities, making them compelling choices for startups looking for a strategic edge. Atlanta ranks sixth, featuring the highest coworking space density nationwide, with more than 18 spaces per 100,000 residents, and a vibrant support system with four accelerators. In seventh place, Austin is celebrated for its low tax rates and a booming tech scene, with 61 startups launched in 2023 and a notable presence of major companies like Dell, Apple and Google.
Miami, taking the eighth spot, stands out with 38 new startups and a strong support system, boasting the fifth highest number of accelerators in the nation and a coworking density of more than 15 spaces per 100,000 residents. Denver, in ninth place, offers a balanced mix with 19 startups, affordable operational costs, and a highly educated workforce – more than 57% of its population holds a bachelor’s degree. Finally, Boston rounds out the top 10 with four accelerators, four incubators and 13 venture capital firms, leveraging its rich educational landscape and proximity to world-renowned universities to support new ventures.
Startup Sweet Spots: Cities Catering to Unique Startup Needs
While these top ten cities offer comprehensive ecosystems, other cities excel in specific areas, making them worth considering based on unique business needs:
– Wichita, Kansas: Standing out for its affordable operational setup costs, Wichita is ideal for startups looking to optimize their budgets.
– Arlington, Virginia: Boasting the highest percentage of residents with bachelor’s degrees (80%), Arlington is perfect for startups in need of skilled talent.
– San Jose, California: This city offers a wealth of funding opportunities, supported by a robust network of angel groups and venture capital firms.
These cities, each with their own strengths, highlight that there’s a perfect place for every kind of startup to flourish. Whether you’re drawn to the tech-heavy landscape of San Francisco, the vibrant urban sprawl of New York, or the sunny startup haven of Los Angeles, the U.S. offers a diverse array of environments for new ventures to thrive.
Read the full study here.
