The Top 10 Most Entrepreneurial States

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General Assembly Campuses In Entrepreneurial States

Being a small-business owner often means taking bold risks against long odds. According to data compiled by the Small Business Administration, only 34.4% of businesses started in the U.S. in 2002 survived until 2012. But where are the most entrepreneurial states?

There are ways entrepreneurs can increase their chance of success. One way is to go where there’s a bustling local economy with a track record of success for entrepreneurs. Another foundation for success is having enough money to run your business by making sure it is properly funded. When it comes to financing, there are more options than ever — whether it’s through the SBA or a number of online lenders.

NerdWallet analyzed data from the SBA and the U.S. Census Bureau’s County Business Patterns to identify the most entrepreneurial states. Although no entrepreneur is guaranteed success, no matter where they set up shop, there are some themes found in our top states.

First, business financing. SBA loans are critical to many entrepreneurs, and Utah and Massachusetts were among the top states in SBA-guaranteed loans per capita. Entrepreneurs in other states that ranked high on our list, including Connecticut and Georgia, received some of the largest SBA-guaranteed loans on average.

Second, venture capital. Venture capital money often flows to early-stage startups, so it follows that eight of the top 10 states for entrepreneurship are also among the 10 places that receive the most venture capital funding.

Last, locations beyond the coasts. Eight of the top 10 states are on the coasts, but not the top two states, which are Utah and Colorado.

Top 10 most entrepreneurial states.

Each location on this list includes the rank of a data point compared with the rest of the nation and Washington, D.C. To see the analysis and all of the data, click here.

1. Utah

57.43 SBA loans per 100,000 people (rank: No. 1)
4.3% small-business growth from 2010 to 2013 (rank: No. 3)

2. Colorado

$17.97 million in venture capital funding per 100,000 people (rank: No. 7)
2.81 small businesses per 100 people (rank: No. 8)

3. California

$84.23 million in venture capital funding per 100,000 people (rank: No. 1)
2.6% small-business growth from 2010 to 2013 (rank: No. 5)

4. Connecticut

$523,091 average SBA loan in 2014-2015 (rank: No. 2)
94.4% average SBA loan size growth from 2012 to 2015 (rank: No. 5)

5. New York

$29.99 million in venture capital funding per 100,000 people (rank: No. 5)
2.4% small-business growth from 2010 to 2013 (rank: No. 7)

6. Washington

$18.98 million in venture capital funding per 100,000 people (rank: No. 6)
95.5% of all businesses are small businesses (rank: No. 12)

7. Florida

3.7% small-business growth from 2010 to 2013 (rank: No. 4)
56.4% growth in SBA loans per 100,000 people from 2012 to 2015 (rank: No. 8)

8. Washington, D.C.

$33.82 million in venture capital funding per 100,000 people (rank: No. 3)
3.11 small businesses per 100 people (rank: No. 5)

9. Georgia

$523,949 average SBA loan in 2014-2015 (rank: No. 1)
60.6% growth in number of SBA loans from 2012 to 2015 (rank: No. 5)

10. Massachusetts

$78.71 million venture capital funding per 100,000 people (rank: No. 2)
47.74 SBA loans per 100,000 people in 2014-2015 (rank: No. 7)

Read Most Entrepreneurial States: Where Small-Business Loans Rule and Startups Abound to see the analysis, data and full methodology.

Methodology

NerdWallet analyzed all 50 states and Washington, D.C. The score for each location was determined by analyzing data from the U.S. Census Bureau, the Small Business Administration and a report by PricewaterhouseCoopers and the National Venture Capital Association. Our analysis examined:

Small-business loan environment, which accounts for 75% of the score, is based on five metrics from the Small Business Administration at www.usaspending.gov and a report by PricewaterhouseCoopers and the National Venture Capital Association.

Local business economy, which makes up 25% of the score, is based on three metrics from the U.S. Census Bureau’s County Business Patterns.

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