Special Report

Why Are These Cities Attracting the Most Startups?

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2. Austin-Round Rock-San Marcos
> Startups per 1,000 businesses: 104.5
> Pct. population started new business per month: 0.51%
> Monthly cost of living: $3,197

Austin has one of the best-educated populations among cities with high rates of entrepreneurship. Some 44.8% of adults in the city have at least a bachelor’s degree, well above the 32.0% national share. Because Austin’s population tends to be well-educated, startups have a wide array of attractive candidates with specialized skills to consider for hire.

Perhaps as a result of the city’s highly skilled workforce, there is no shortage of startups in Austin. More than 10% of companies in the city are less than one year old and have at least one employee, fourth highest among major cities.

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1. Miami-Fort Lauderdale-Pompano Beach
> Startups per 1,000 businesses: 107.8
> Pct. population started new business per month: 0.56%
> Monthly cost of living: $3,107

According to the Kauffman Foundation’s latest report, The Miami-Fort Lauderdale-Pompano Beach metro area has the most startup activity of any major U.S. metro area. In a given month, 0.56% of the Miami area’s residents become entrepreneurs, tied with Los Angeles for the highest rate in the country.

Miami also has the second highest startup density in the country. Some 10.8% of companies are less than a year old and have at least one employee other than the founder, behind only Las Vegas. The percentage of Miami small businesses with only a handful of employees has increased significantly over the past few decades. In 1983, 47.3% of small businesses in the area had fewer than five employees. By 2014, 64.7% of Miami area small businesses had four or fewer employees.

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