Raleigh, North Carolina is One of the Top 15 Startup Cities in the U.S.
When starting a business, choosing the right location is everything. Approximately 20% of new businesses fail in the first 12 months, and 45% won’t survive the first five years. Launching a startup is even more risky during the pandemic, which has caused more than one-third of small businesses to close since 2020.
But the best cities can help startups survive. To be successful, entrepreneurs need to build their businesses in areas with favorable tax laws, access to funding, and a local talent pool of educated workers.
To determine the best cities for starting a business, Clever Real Estate analyzed publicly available data from the U.S. Census Bureau, Bureau of Economic Analysis, Bureau of Labor Statistics, UpCounsel, Google Trends, U.S. Patent Office, and the American Legislative Exchange Council Center for State Fiscal Reform.
The weighted rankings evaluated various criteria, including:
3x: Business applications per 100,000 people in the last five years
3x: Employment growth in the last 12 months
2x: Average annual income
2x: LLC filing fees
2x: Incorporation filing fees
2x: Corporate tax rate
2x: Chief executives per 1,000 people
1x: Google Trends data
1x: Patents filed per 1,000 people in the last five years
Raleigh had an average of 6,228 business applications per 100,000 residents in the last five years compared to the national average of 5,931. With an employment growth of 4.90% in the last 12 months and 0.6 out of 1,000 people who claim the CEO title, Raleigh is a very attractive place for business owners and entrepreneurs. Raleigh also offers a corporate tax rate of 2.50% and an incorporation fee of $125.
Sheria: As an expert in this industry, why do you believe the city of Raleigh's population has increased over time?
Jaime: A big factor in Raleigh's growth is its affordable cost of living. Raleigh has a cost-of-living index of 68.2, far below New York City (100) and many other large cities in America. As work becomes more remote, mid-sized cities with affordable costs and interesting cultural features draw business owners and talented workers. Not only does Raleigh have plenty of job opportunities, but it's also a nice place to live with a great dining scene, outdoor activities, and proximity to mountains and beaches.
Sheria: With the many businesses starting in the area, how will that improve the economy over the next five years?
Jaime: A growing business community encourages local development by creating new jobs and attracting new investors to the area. In the long run, the influx of money results in increased income levels across the community and improves the quality of life.
Sheria: What advice would you give an aspiring entrepreneur to start a business in Raleigh?
Jaime: They should connect with other entrepreneurs. Through groups like Innovate Raleigh and EO Raleigh-Durham, the city offers great opportunities for entrepreneurs to meet, share ideas, and grow together.
The complete list of the 15 best startup cities includes (in order of ranking):
Las Vegas, Nevada
Salt Lake City, Utah
Orlando, Florida
Miami, Florida
Atlanta, Georgia
Tampa Bay, Florida
Phoenix, Arizona
Jacksonville, Florida
Denver, Colorado
Kansas City, Missouri
Raleigh, North Carolina
Oklahoma City, Oklahoma
San Jose, California
Los Angeles, California
Nashville, Tennessee
Since 2016, Real Estate Witch has demystified real estate through in-depth guides, honest company reviews, and data-driven research. In 2020, Real Estate Witch was acquired by Clever Real Estate, a free agent-matching service that has helped consumers save more than $70 million on realtor fees. Real Estate Witch’s research has been featured in CNBC, Yahoo! Finance, Chicago Tribune, Black Enterprise, and more.