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The Best American City to Launch a Startup in 2020

Have you ever wondered what the biggest difference between the ordinary people and IT geeks is? Well, the first group believes that Silicon Valley is the center of the startup world, while the second can easily explain the difference between Silicon Beach, Silicon Mountain, and Silicon Alley. And if you feel like googling all the three names, don’t even bother: we are here to save your time. In this case, the ‘big three’ stands for Los Angeles, Denver, and New York accordingly.

And yes, it is confusing. With all these new tech centers emerging and competing with one another, it gets close to impossible to tell which American city is going to be the next big thing for launching a startup. But here at Rentberry, impossible equal interesting. So we accept the challenge and create the list of the best American cities for a startup in 2020.

San Francisco, CA

Despite the surging rent prices for office spaces and one of the highest residential rent in the United States, San Francisco remains the primary launching pad for start-ups from across the world. San Francisco is the tech stronghold of the world serving as headquarters for tech juggernauts such as Facebook, Apple, Paypal, Cisco and Google. Silicon Valley is a golden standard for the tech hubs of the world with a mature business ecosystem, network of angel-investor, diverse accelerators and venture funding opportunities. Last year, Silicon Valley startups raised over $15.4 billion, in the the supergiant funding rounds of $100 million and more. The local policymakers work hand-in-hand with the tech community to create a welcoming environment for tech founders. From 2012, the businesses with less than $1 million in gross receipts are exempt from paying the local taxes on them by the city council initiative. Additionally, the city provides the payroll tax exclusion for the biotech companies in the Bay area. Additionally, the city funds the web-and-code training and placement program to increase the competence of the urban workforce.

Most famous startups: Dropbox, Medium, Airbnb
Venture capital investment per capita: $1,415

Launch your startup in Boston, MA

Boston, MA

Given Boston’s proximity to the leading universities (MIT, Harvard, and more) and its long history of computer science development, no wonder why the city is so good at mirroring the advantages of Silicon Valley. Recent studies show that entrepreneurs in Boston have a higher quality of life. In fact, Walk Score ranked Boston the 3rd most walkable large city in the country. Plus, the average rental price here is significantly lower than in Silicon Valley. According to our statistics, locals pay approximately $2,116 per month for a 1-bedroom apartment in the city center. What’s more, Boston is known for its strong connections with institutions and universities. It is an exceptionally educated city (as much as 45.2% of local adults have bachelor’s degree or higher), which creates perfect conditions for new enterprises to appear, grow, and prosper.

Most famous startups: Facebook, Hubspot, Runkeeper
Venture capital investment per capita: $665

San Diego, CA

San Diego is an up-and-coming startup ecosystem. For years, San Diego has been a beachtown and a biotech town. The vast share of venture capital funding went toward the city’s healthcare innovations, biotechnology and applied life science research. Those industries are primary drivers of growth of the local economy. Nevertheless, over the past years the local tech scene started to pick up steam due to the proactive coders community. In 2012, the group of local enthusiasts started an annual gathering Startup San Diego to promote investments in local tech. The first event gathered a little over two hundred people. Last year, the attendance grew to over 4,500 participants. The city government reinforced these initiatives, with programs to boost the technological brand of the city and steal tech talents from the Bay Area, outlining the city’s affordable housing, lower cost of living, and year-round surfing weather. As a result, the city slowly got a footing in the tech industry, with its first unicorns Seismic and TuSimple.

Most famous startups: Classy, TakeLessons, SweetLabs
Venture capital investment per capita: $434

Launch your startup in Austin, TX

Austin, TX

There are plenty of reasons why you should turn your attention to Austin, but the absence of state taxes, affordable housing ($1,324 per month for a 1-bedroom apartment), and local talent pool (thanks to the University of Texas) are chief among them. No wonder why this city has already become home to more than 4,700 hi-tech companies and almost 50 startup accelerators and incubators. Whether it is strong local support or the Austin Chamber of Commerce or a large piece of luck, but chances are good that Austin will keep on accumulating its significance on the American tech scene.

Most famous startups: BigCommerce, HomeAway, Indeed
Venture capital investment per capita: $323

Washington, D.C.

Like it or not, but the odds are good that Washington, D.C. is soon to become the next big tech hub. Despite the high price for rent ($2,266 per month for a 1-bedroom apartment) and a relatively low transit score (only 77 out of 100), entrepreneurs are flocking to the city. It is hard to argue that the local tech sector is dependent on the government and it’s not cheap to found a startup there, but some factors seem to outweigh the drawbacks. First and foremost, the city is famous for its rich collaborative culture and a high level of diversity. In fact, Washington area is considered one of the most diverse in the entire country. Here in DC, people want each other to succeed, which is why you can always rely on a helping hand of others. Local think tanks and universities make DC incredibly educated. This city is brimming with brilliant developers, designers, and team leads.

Most famous startups: Analytica, LivingSocial, Technica.ly
Venture capital investment per capita: $138

Launch your startup in Los Angeles, CA

Los Angeles, CA

The up-and-coming startups from Los Angeles give us grounds to call the city Silicon Beach. Don’t be fooled by the laid-back lifestyle, beaches, and entertainment the City of Angels is so famous for. In fact, Los Angeles seems to be one of the major wavemakers in the ‘tech ocean.’ Hard to tell what exactly makes this city booming with promising startups, but chances are good that the famous faces and the megaphone-like nature of the city are both playing the key role. If you are thinking of moving to LA, you’d be glad to know that the city that’s been once built for cars is now becoming more and more suitable for walks and bike rides. Plus, the median rent in here is lower than in San Francisco or San Jose: locals pay around $3,081 per month for a 1-bedroom apartment in the city center.

Most famous startups: Snapchat, FullScreen, Clutter
Venture capital investment per capita: $110

New York, NY

Hopefully, you are not too surprised to see the Big Apple on the list. Although New York attracts significantly less in venture capitals, there is one thing that makes the city stand out in the global startup scene. This one thing is usually referred to as hyphen tech. More and more startups gain their popularity by aligning themselves with a number of industries. This is how media tech, fin tech, fashion tech and anything-else-tech startups emerge and succeed. It is worth being said that New York City is ranked the most walkable city in the United States, and its rental prices are not as high as in San Francisco. At an average, New Yorkers pay $2,952 per month for a 1-bedroom apartment.

Most famous startups: Foursquare, Kickstarter, BuzzFeed
Venture capital investment per capita: $105

Denver, CO

The times when Denver was most famous for its picturesque mountains seem to have sunk into oblivion. Slow but sure, the city turns into another center of innovation and tech. As Denver continues to boom with startup ideas, more and more millennials seem to flock there. According to industry experts, there were two major factors that unlocked the city’s potential. First was the TechStars, startup accelerator founded by four passionate entrepreneurs. The second and crucial factor was the government approval. The city was lucky to have both Colorado Governor and Denver Mayor agree upon the fact that support of startups should be a top priority. All in all, Denver is a great place to live. The average rental price for a 2-bedroom apartment is $2,516 per month, and the local cost of living index is 82.64, meaning it is relatively cheap to live there.

Most famous startups: Craftsy, Tech Mobile, Zen Planner
Venture capital investment per capita: $90

And what is next?

We wouldn’t go as far to say that the Silicon Valley has lost its lust, but it is time to face the truth: it no longer holds a monopoly on innovation. No matter for how long we’ve been taking it for granted that this place is the center of the startup universe, it’s time to challenge the status quo.

1 Comment

  1. I think every city has there own problems, so any city can be good for launching your startup depending on the category or problem solving nature of the startup

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