The best (and worst) states to begin a start-up

Start-ups are cool. You can learn a lot working at a start-up given that – you know – it’s a start-up and everyone is figuring out what works on the fly (this is also a metaphor for life).

However, if you have a brilliant idea that the world needs to see, and you’re thinking about starting up a start-up, it’s best to know where to start up a start-up before you close down before you even start up.


Lucky for you, we’ve already done the research. Welcome to the point of this study.

Today, we’re looking at the best states to start up a start-up. And that was my last use of alliteration, I promise.

These are the 10 best states in America to open a start-up:

  1. Massachusetts
  2. California
  3. Colorado
  4. Washington
  5. New York
  6. Utah
  7. Virginia
  8. Maryland
  9. Oregon
  10. Texas

Well, well, well Silicon Valley actually isn’t the best place to be in the start-up world after all.


Let’s dive a little deeper into the data.

Summary of findings

  • Massachusetts is the best state for start-ups – each establishment received an average of $2.5 million to begin operations
  • California, home to the aforementioned Silicon Valley, comes in at second on the list – the state still had the most deals for start-ups at 586
  • Colorado, Washington, and New York round out the top five states
  • Mississippi ranks as the worst state to begin a start-up
  • Wyoming, South Dakota, Montana, and Alaska round out the bottom five

How we did it

For this study, we created an index using data from PricewaterhouseCoopers’ Q2 2018 MoneyTree Report and The Kauffman Index.

Each state was ranked across four categories involving start-ups:

  • The state’s Kauffman Index
  • Overall deals for start-ups
  • Deals for start-ups per-capita
  • The amount start-ups were funded per-capita

The Kauffman Index separates states by larger and smaller distinctions, then ranks each state 1 to 25 based on their rate of startup growth.

The other three figures are self-explanatory, but all come from PwC’s data.

Amount per-capita comes from dividing the total amount of money funded for start-ups by the state’s population.

Deals per-capita comes from dividing the total number of deals by the state’s population.

Note that Louisiana, West Virginia, and Oklahoma, along with the bottom five states, had no deals or funding available in the data.

Wrapping up

Overall, PwC’s report states that a record $23 billion was invested across 1,416 deals nationwide during Q2.

So there’s no time like the present to grab a patent for your game-changing idea of sunglasses for dogs and get to shakin’ and movin’.

Now, let’s check out where each state ranks:

This article first appeared on Zippia.