Best (and Worst) States to Launch a Technology Startup

If you’re looking for a place to launch a startup, Silicon Valley is still a good choice. It’s just not your best option.

That distinction goes to Massachusetts, which tops Zippia’s list for best states to launch a startup. Using two main data points – the PriceWaterhouseCoopers’ (PwC) MoneyTree Report and the Kaufman Index – Zippia was able to distinguish how many deals were made, and the total amount of funding for those deals. It then returned various other data points, such as how much each deal was worth per capita.

Overall, $23 billion was invested across 1,416 deals in the second quarter of 2018, says PwC. As you see in the chart below, California took the lion’s share of that funding, but it fell short of being the best place to launch a startup. Massachusetts took the top spot because it had a healthier amount of funding and deals per capita (which accounts for population).

With nearly $3 billion funded across 113 deals, the average Massachusetts startup raked in just over $25 million. That exceeds California’s average pull of $20.7 million per deal.

There are a few other surprises, as well. Colorado ranks third; while we know Denver has a thriving tech scene, its venture capital is also healthy. Washington, home to so many big tech firms such as Amazon and Microsoft, checks in at the fourth spot. New York rounds out the top five.

Utah ranks sixth, which joins Virginia (seventh place) as two states we didn’t expect to see ranked so highly. Maryland, Oregon, and Texas round out the top ten.

Zippia tells us only 42 states made the MoneyTree and Kaufman Index, but the bottom of this barrel probably won’t surprise you. Iowa is the absolute worst place for startups, with only $1 million funded across two deals. Arkansas, Idaho, Vermont, and Kansas round out the bottom five. All told, the worst five states averaged just shy of $3.5 million per deal, a number skewed heavily by Kansas’ one deal worth $10.4 million.

Whether you’re launching your own startup or taking a job at one (or several), Zippia’s full list is a great resource. If nothing more, it’s a way to know if startups in your state are averaging a lot of funding, without needing to take their word on it. When it comes to many startups, blustery bragging about money could be masking an impending acquisition.

5 Responses to “Best (and Worst) States to Launch a Technology Startup”

  1. I am skeptical of that list, simple because it lists Colorado so high. Having been born in Colorado, even though it has several fine public and private universities (I have degrees from 3 of them), the few ‘tech’ jobs I could get paid less per hour than ‘convienance store clerk’ and had almost no benefits. Oh, one of them did go out on a limb and took out a term life insurance policy on me, of which the corp. was beneficiary. Mundane job faires with every big bank represented but all requiring a reloacation to bitter-cold Minnesota because that’s where they all had their ID departments. I left Colorado 5 years ago after living there my entire life there, and unable to raise any interest in employing me for anything, whther it was Lockeed-Martin or Walmart. Or Dish. And I’m not interested in relocating to some state where I have to hemorrhage money to keep from freezing to death.

    • Doesn’t necessarily have anything to do with the universities there. You didn’t look hard enough…. it says best place to start a tech start up based on deals made and funding secured by… tech start ups… so obviously they are not well known companies like Lockheed Martin….not to mention 5 years is a lifetime in technology and especially the recent startup tech boom.

      If you couldn’t find a “tech job” making more than minimum wage, you must not have current tech skills that are useful in the industry. Tech jobs are everywhere and cross into every industry significantly no matter where you go since every industry relies on technology to do anything these days.

      • yurakm

        I would disagree with you, Tony. Many places are dead zones concerning tech. It includes complete states. How high is demand for “current tech skills” in West Virginia? I am pretty sure than substantially lower than for run of the mill SQL or Web design, that also is very far from high …

        Even in California and Massachusetts the demand is concentrated in a few locations. Silicon Valley + San Francisco and greater Boston are powerhouses, greater Los Angeles and Sand Diego are fine, but practically all parts of CA roughly 50 miles from the coast are not much better than Arkansas, and the same can be said about Western MA.