Solving Cities

Top 5 U.S. cities for startups

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Which cities are the places to be for tech startups?

Thanks to technology it doesn't take much more than a laptop and a great idea to start a business. But the freedom to start a business from anywhere an internet connection is available hasn't made place irrelevant. Some cities are still better places than others for startup companies.

VentureBeat has come up with the five metropolitan areas where startups thrive. The list is based on, among other factors, city tax breaks for small businesses, government programs to help startups, talent pools, and culture. Here's the list:

  1. San Francisco
  2. Los Angeles
  3. Denver
  4. Washington, D.C.
  5. New York City

And three honorable mention cities: Austin, Seattle, and Raleigh/Durham, N.C.

It's no surprise, really, to see San Francisco (along with the larger Silicon Valley) top this list ("it’s nearly impossible to sit in a bar in the city and not overhear a conversation about so-and-so’s startup or startup idea"), there are plenty of big-money tech companies looking for the next big startup. But what do the other cities have to offer startups?

Los Angeles is home to about 1,300 startups and 1,500 investors according to AngelList. In 2011, VCs made 208 deals worth about $2 billion.

These numbers are likely to grow in coming years as LA produces more startup stars to join FandangoTicketmaster and Legal Zoom (like maybe one of these).

And don’t forget, LA has Ashton Kutcher. Hey, that’s no laughing matter.

Denver makes the list thanks to some big name tech companies, along with lower real estate costs and a high number of people who self-identify as "creatives."

While Denver has yet to produce a blockbuster startup success story, its roster of names isn’t too shabby: ReadyTalk, Mapquest, Photobucket, and more.

Washington, D.C. rates high with a talented, educated population. And they're not just working government jobs.

Startups located close to the city include green-energy play Opower, Uber cab sibling Taxi Magic, GroupOn rival Living Social, and the list goes on.

Evidence has shown that nothing’s better for startups than a city that wants them. And D.C. and its surrounding cities want them badly.

Insane costs might push New York down the list. But what it lacks in affordability, it certainly makes up in other categories.

Following the financial collapse in 2008, a lot of young bright things — including an army of software engineers, designers and others — found themselves unemployed, looking to do anything except finance. New York responded well to this trend, spinning startup-friendly policies to keep the cream of the crop in town. This has allowed capital to flow more freely for new businesses and support founders in their efforts.

If you're not convinced, just look for yourself.

Go here to see all the reasons why VentureBeat chose these five cities.

Photo: Flickr/Kevitivity

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Tyler Falk

Contributing Editor

Tyler Falk freelance journalist based in Washington, D.C. Previously, he was with Smart Growth America and Grist. He holds a degree from Goshen College. Follow him on Twitter. Disclosure