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Best Cities for Young Entrepreneurs


Young entrepreneurs started many of the tech powerhouses of this decade—Facebook and Twitter were both started by founders under 30.  Young entrepreneurs often have little savings and few years of business experience, so they need funding as well as mentors and collaborators, and they need to be able to get their small business off the ground cheaply.  NerdWallet sifted through the factors that matter to young entrepreneurs—funding, collaboration, economic factors and affordability—to determine which cities are the best for youngsters looking to launch their own startup.

NerdWallet calculated the best cities for starting a small business according to the following questions:

1. Is it easy to obtain funding? We measured the amount of C&I loans under $250,000 given out over a one-year period.  NerdWallet’s interviews with over 40 CEOs from lending institutions indicated that while traditional bank capital for start-up businesses is difficult to obtain, there are certain actions small business owners can take to improve their chances of getting approved for loans.

2. How affordable is the city? Start-ups need to be able to grow cheaply until they get rolling, so we included the cost of living in this analysis.

3. Can you network and collaborate with other educated business leaders??  We assessed the accessibility of potential collaborators with business experience and education by including the number of businesses per 100 residents and the percentage of the population with a bachelor’s degree.

4. Is the local economy thriving? We assessed the state of the local economy through per capita income, unemployment rate and population growth of the city.


For more information, check out our Cost of Living Calculator, City Life tool, and additional CEO perspectives on small business loans.

Best cities for young entrepreneurs

1.    Tulsa, OK

Tulsa earned the top spot in our study, largely due to the high availability of C&I loans.  Tulsa’s low cost of living and low unemployment rate contributed to its win as well.

2.    Tampa, FL

There are loans aplenty in Tampa, and the cost of living is low enough that young entrepreneurs can keep expenses low.  Cigar City is an ideal place for young entrepreneurs to start out their ventures.

3.    Atlanta, GA

Hotlanta’s population is rapidly growing, and the city’s highly educated population benefits from the low cost of living.  Loans are available, and the fact that there are 9.8 businesses per 100 residents indicates that the city has a business-friendly climate.

4.    Raleigh, NC

Raleigh is a highly educated city, likely largely because students and researchers flock to the Research Triangle.   Raleigh’s low cost of living and high loan amounts make this city especially friendly to young first-time entrepreneurs.

5.    Oklahoma City, OK

Oklahoma City has a low cost of living and a history of generous lending, making this city perfect for young entrepreneurs with little savings.

6.    Seattle, WA

Although Seattle’s cost of living is higher than the average city, The Emerald City’s large number of businesses per capita and highly educated workforce means there are plenty of smart, experienced collaborators that young entrepreneurs can find and network with.

7.    Minneapolis, MN

Minneapolis residents are highly educated, and they benefit from the city’s low unemployment rate.  This business-friendly city has over 10 businesses per 100 residents, making this a great place to network with other businesspeople.

8.    Austin, TX

Austin is a rapidly growing technology hub, boasting a highly educated population as well as a low cost of living.  Young entrepreneurs should check out this music-loving, tech-friendly city—the nonexistent corporate taxes give Austin an extra boost as well.

9.    Omaha, NE

Omaha’s low unemployment rate, high availability of lending and low cost of living contribute to its designation as one of the best cities for young entrepreneurs.

10.  Houston, TX

Lending is flowing in Houston, and Texas’s nonexistent corporate taxes are particularly beneficial to young entrepreneurs with little savings.  Young entrepreneurs could go far in Houston.

Rank City Small C&I loans (in $1,000’s) Loans/ population Cost of living index # Biz per 100 people % With Bachelor’s degree Income Unempl-oyment Change in population Overall score
1 Tulsa, OK $125,451 $316 88.3 10.7 29.50% $26,727 6.50% 1.20% 73.6
2 Tampa, FL $79,241 $229 92.2 11.5 32.20% $28,863 11.20% 3.10% 68.7
3 Atlanta, GA $62,234 $144 95 9.8 46.10% $35,884 12.10% 3.00% 65.3
4 Raleigh, NC $43,923 $105 90.9 10.5 47.30% $30,377 7.60% 3.10% 65.1
5 Oklahoma City, OK $118,547 $200 90.5 10.3 27.90% $25,450 5.70% 2.10% 65
6 Seattle, WA $41,128 $66 116.2 12.5 55.80% $41,695 7.50% 2.00% 62.7
7 Minneapolis, MN $52,566 $136 110.8 10.4 44.70% $30,693 6.30% 1.40% 61
8 Austin, TX $28,370 $35 94.4 10.8 44.50% $31,170 6.20% 3.80% 60.6
9 Omaha, NE $51,868 $125 89.4 8.1 27.80% $26,113 5.10% 1.50% 56.9
10 Houston, TX $250,528 $117 94.2 9.9 28.40% $26,849 8.20% 2.20% 56.7


The overall score for each city was derived from the following measures:

1. C&I Loans from community banks (with assets less than $1 billion) with original amounts under $250,000 via the FDIC, as of December 31, 2012, divided by the population

2. Cost of living from the C2ER Cost of Living Index

3. Number of businesses per 100 residents from the U.S. Census (weighted .5)

4. Percentage of residents with a Bachelor’s degree from the U.S. Census (weighted .5)

5. Per capita income from the U.S. Census (weighted .33)

6. Unemployment rate from the Bureau of Labor Statistics (weighted .33)

7. Population growth rate from the U.S. Census (weighted .33)

43 of the largest U.S. cities were included in this analysis

  • Christian Losciale

    This is a great piece, but I am curious if you could somehow account for expanding industries. For instance, how will the new marijuana laws affect entrepreneurship in Washington state? Just a thought.

    -Christian L. @ Smart Military Money

    • NWDivya

      Hi Christian,

      That’s a great point! Maybe we can revisit this topic in a few months and see how the emerging marijuana industry has changed the Washington economy.


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  • Nomad Capitalist

    The cost savings and business intelligence achieved by living outside the US make it a far more attractive proposition for young entrepreneurs, IMHO. Happening cities in Asia boast western-style apartments from $300-500 a month – with swanky penthouses going from $1000-2500 once you’re established – and often include free maid service, laundry service, etc. so you can focus more on business and less on nonsense.

    Sorry, but I don’t want to live in Tulsa. And I can’t imagine the networking scene there is nearly as good as it is in Ho Chi Minh City, Singapore, Jakarta, or smaller cities like Davao, Philippines. There are tons of people abroad living with no language skills outside of English, and starting great businesses. I think it’s the next big wave – and the money you save can be pumped back into the business. Big advantage.

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