Austin Outranks Silicon Valley as America’s #1 City for Startups
Sometimes, Austin folks feel like they’re living in the shadow of America’s major metro areas. But a new ranking of the best U.S. cities for startups flips the script by putting all of the nation’s largest cities in our shadow.
In the ranking, produced by commercial real estate platform CommercialCafé, Austin appears at No. 1 among the country’s 20 best cities for startups and entrepreneurs, ahead of key markets like Washington, D.C. (No. 2); Seattle (No. 3); Denver (No. 4); and San Francisco (No. 5). The Capital City is first in startup density and non-employer growth, third in tech job market expansion, and fourth in millennial population growth, according to the report.
CommercialCafé’s analysis looked at the 50 most populous cities in the U.S. For each city, CommercialCafé examined these data points: growth rate for solo businesses, startup survival rate, startup density, startup growth rate, success of Kickstarter fundraising campaigns, education levels, growth in tech employment, wage growth, rent-to-income ratio, coworking costs, and presence of millennials.
Among the factors in Austin’s favor were its tech employment growth (37 percent), millennials’ share of the population (31 percent), success of Kickstarter fundraising campaigns (26 percent), low rent-to-income ratio (19 percent), startup density (17.9 percent), and growth of solo businesses (3.9 percent).
One element of economic development in the Capital City comes from Innovate Austin, an initiative from the Austin Chamber of Commerce which focuses on drawing innovation- and technology-based businesses to the region and maintaining them. According to the initiative, 6,500 high-tech businesses, and 90 incubators, accelerators, and maker and coworking spaces call Austin home. In 2018, venture capital deals made in the city totaled 124.
“The policy update allows for a range of economic development tools that can address community needs and service gaps,” said Rebecca Giello, interim director for the city’s Economic Development Department, in a release. “It allows the department to be more responsive to market realities and creates an agile framework for future programs to respond to Austinites’ expectations of economic development investments.”
Elsewhere in Texas, Fort Worth edges out Dallas, ranking second in Texas and 12th nationally. Dallas follows as third statewide and 15th nationally, and Arlington, which ranks fourth in-state and 19th nationally, is the only other Texas city noted in the report.
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