15 US Cities with the Most Startup Activity

Austin beat out Silicon Valley’s San Jose and San Francisco as the US city with the most startup activity, in 2015 Kauffman Index data released last week. The Kauffman Index is an annual look at startup activity across US cities and states by the entrepreneurship-focused Kauffman Foundation.

The home of SXSW, where thousands of entrepreneurs and innovators flock every March, Austin boasts almost 4,900 new entrepreneurs per month. About 80% of those are leaving their old jobs in order to start companies, rather than starting up as a solution to unemployment – always a good sign. The rankings last year had San Jose on top, followed by Austin and Miami.

Here’s how Kauffman defines the different terms you’ll see below:

  • Startup: A business than is younger than one year old.
  • Entrepreneur: Anyone who owns their own business, whether they have employees or not, and works on it for at least 15 hours a week.
  • Rate of new entrepreneurs: The number of people who change from a different job (or no job) to owning their own business, per 100,000 adults per month.
  • Opportunity share: The percentage of new entrepreneurs not coming out of unemployment, which suggests that they are motivated by a market opportunity rather than economic necessity. San Jose has a high 91.2% opportunity share, while Atlanta is the lowest in the top 15 with 69%.
  • Density: The number of startups per 100,000 people. Miami has the highest density, with almost 250. The average startup density of the United States is 130.6.

This ranking was based on the most recent data from the Current Population Survey and the US Census Bureau – in this case, yearly data for 2012 (startup density) and moving averages for 2014 (rate and opportunity share).

Here are the 15 US cities with the most startup activity:

1. Austin

Rate of new entrepreneurs: 550

Opportunity share of entrepreneurs: 79.3%

Startup density: 180.8

2. Miami

Rate of new entrepreneurs: 520

Opportunity share of entrepreneurs: 73.9%

Startup density: 247.6

3. San Jose

Rate of new entrepreneurs: 410

Opportunity share of entrepreneurs: 91.2%

Startup density: 168.3

4. Los Angeles

Rate of new entrepreneurs: 500

Opportunity share of entrepreneurs: 72.3%

Startup density: 170.4

5. Denver

Rate of new entrepreneurs: 370

Opportunity share of entrepreneurs: 85.7%

Startup density: 177.8

6. San Francisco

Rate of new entrepreneurs: 390

Opportunity share of entrepreneurs: 80.7%

Startup density: 161.8

7. New York

Rate of new entrepreneurs: 340

Opportunity share of entrepreneurs: 81.0%

Startup density: 197.3

8. Houston

Rate of new entrepreneurs: 400

Opportunity share of entrepreneurs: 75.4%

Startup density: 136.9

9. San Diego

Rate of new entrepreneurs: 340

Opportunity share of entrepreneurs: 80.9%

Startup density: 154.7

10. San Antonio

Rate of new entrepreneurs: 340

Opportunity share of entrepreneurs: 86.5%

Startup density: 111.9

11. Las Vegas

Rate of new entrepreneurs: 380

Opportunity share of entrepreneurs: 72.7%

Startup density: 158.3

12. Columbus

Rate of new entrepreneurs: 350

Opportunity share of entrepreneurs: 80.0%

Startup density: 104.0

13. Atlanta

Rate of new entrepreneurs: 370

Opportunity share of entrepreneurs: 69.0%

Startup density: 154.5

14. Phoenix

Rate of new entrepreneurs: 340

Opportunity share of entrepreneurs: 76.7%

Startup density: 127.5

15. Dallas

Rate of new entrepreneurs: 300

Opportunity share of entrepreneurs: 78.0%

Startup density: 142.5

See the full rankings (up to 40 cities), and an in-depth report (PDF).

Image credit: Larry D. Moore / Wikimedia Foundation / CC BY-SA 3.0 (cropped)

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Written by:
Kira M. Newman is a Tech Cocktail writer interested in the harsh reality of entrepreneurship, work-life balance, and psychology. She is the founder of The Year of Happy and has been traveling around the world interviewing entrepreneurs in Asia, Europe, and North America since 2011. Follow her @kiramnewman or contact kira@tech.co.
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