Commercial Cafe, an online commercial real estate platform, releases an annual list of best cities for startups in the U.S. For the fourth year in a row, Austin has taken the top spot in the ranking over every other major city in the assessment. According to Commercial Cafe, 2018 was one of the best years for startups in Austin, which helped boost the city’s ranking.
To develop the ranking, analysts at Commercial Cafe narrowed down their assessment to the 50 most populous cities in the U.S. Then, each city was given a ranking in eleven different categories. The categories in the ranking include:
- The growth rate for solo businesses
- Startup survival rate
- Startup density
- Startup growth rate
- The success of Kickstarter fundraising campaigns
- Education levels
- Growth in tech employment
- Wage growth
- Rent-to-income ratio
- Coworking costs
- Presence of millennials
Within the above categories, Austin ranked first in startup density and non-employer growth. It ranked third in the category for the tech job market. For millennial population growth, Austin ranked fourth.
Overall, Austin ranked number 1 among the best cities for startups in the U.S., beating out other thriving markets like Washington, D.C. (No. 2); Seattle (No. 3); Denver (No. 4); and San Francisco (No. 5). Commercial Cafe made mention of the incredible year Austin startups had in 2018 as a strong indicator that the startup scene in the Capital Metro will continue to grow.
“[T]he Austin startup community had one of its best years in 2018,” CommercialCafé declares. “According to PWC research, over $1.3 billion was invested, a local record in the two decades since the dot-com boom. The increased diversity of the local tech scene — which now includes e-commerce platforms, legal tech firms, tech-enabled services, health tech companies, food tech companies, and more — is slated to keep Austin in the lead of fertile startup cities for quite a while.”
Additionally, the Austin area’s economic development has gone a long way to help create a healthy startup scene. One aspect of the economic development plan includes the Innovate Austin initiative. It’s an effort of the Austin Chamber of Commerce which focuses on drawing innovation- and technology-based businesses to the region and maintaining them. According to the initiative, 6,500 high-tech businesses, and 90 incubators, accelerators, and maker and coworking spaces call Austin home. In 2018, venture capital deals made in the city totaled 124.
The City of Austin is also working to ensure that economic development addresses local community concerns. To that end, the City council adopted new guiding principles for economic development in August 2018. Some requirements include having a “living wage” for Austin-based employees of companies that receive incentives from the city and helping remove barriers to employment faced by some individuals.
“The policy update allows for a range of economic development tools that can address community needs and service gaps,” said Rebecca Giello, interim director for the city’s Economic Development Department, in a release. “It allows the department to be more responsive to market realities and creates an agile framework for future programs to respond to Austinites’ expectations of economic development investments.”
Elsewhere in Texas, Fort Worth edges out Dallas, ranking second in Texas and 12th nationally. Dallas follows as third statewide and 15th nationally, and Arlington, which ranks fourth in-state and 19th nationally, is the only other Texas city noted in the report.
Austin is one of the most dynamic and economically stable cities in the U.S. The Commercial Cafe ranking is further proof that the Austin economy is likely to continue to thrive and grow, bolstered by the strong startup scene in the area. That, along with the growing number of large companies moving or expanding their headquarters in the Austin area.
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