The Best States to Launch a Startup

by Elik Dermer

Uber, Snapchat and even Facebook — these each started as a small startup, some with hardly any financing behind them. A simple business idea can often blossom into something much greater and successful; however, sometimes it can seem that the odds are against it. After all, 20 percent of businesses fail in their first year, 30 percent in the second and 50 percent within five.

To succeed, entrepreneurs need to think very carefully about several factors before kick- starting a business, with location being just one of the many top priorities. In the U.S., there are some states that provide a better business growth environment.

The team at Comparisun has compared each of the 50 United States on new business applications, year-on-year application growth, business survival rate, the rate of new entrepreneurs, corporate tax rate, the share of collegeeducated population, labor cost and cost of living to reveal where the best state to launch a startup could potentially be.

Texas is by far the best place to begin a new startup venture, with an overall weighted score of 77.77/100. The talent pool is deep, its business survival rate is more than promising and the tax benefits are certainly attractive.

At the bottom of the list is Rhode Island, with an overall score of 38.06 and a business survival rate of 47.20 percent. New business application growth is in negative figures, at 29.07 percent. Just behind in positions 48 and 49 are West Virginia and Delaware.

Arizona’s business survival rate, at 49.10 percent, is well below the top states in that category — South Dakota (56.00%), Massachusetts (55.20%) and Minnesota (54.50%) — but, taking all factors into consideration, Comparisun’s research results put Arizona as a top five state in the nation for businesses to launch a startup.


Elik Dermer is the founder and CEO of Comparisun, an international team of experienced entrepreneurs who have first-hand experience starting and managing a business. They understand and relate to the essentials of starting a successful business, and started Comparisun to help business starters choose the right products for them, and get the best deal.

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