Charlotte is not just a financial hub — it's also an attractive city for entrepreneurs to launch their startups.
The Queen City ranks at No. 9 among the best cities to establish a startup in 2024, with about 19.3 business applications filed per 1,000 residents over the last year, according to a new report by real estate platform Home Bay. That rate is 29% more than the average of 16.7 among the cities studied. Between 2018 and 2022, Charlotte had about 16.1 business applications filed per 1,000 residents.
"With homegrown companies such as LendingTree proving small businesses can make it big in Charlotte, more entrepreneurs are planning to take the plunge," Home Bay said in the report.
Charlotte saw 2.5% in job growth from November 2022 to November 2023, had an average annual income of $65,156 and recorded a 2.5% tax rate, the report said. The area gained about 24 CEOs per 100,000 residents, and 29.2% of the local population has bachelor's degrees.
While the area looks to be an inviting market for new startups, Charlotte still struggles with increasing its access to venture capital. Charlotte invested $442 million in venture capital last year. That figure is roughly 7% lower than the average of $475 million among cities in the study.
However, Home Bay pointed out that Charlotte has a growing number of capital resources. For example, Charlotte Angel Fund is one of the city's biggest sources of capital for emerging startups, while Charlotte Fund focuses on later-stage and seed-stage companies.
Charlotte placed higher overall than Raleigh, which ranked at No. 13 among the best cities to start a new business. Raleigh residents filed about 15.2 business applications per 1,000 residents between 2018 and 2022.
But Raleigh registered more VC investments than Charlotte in the last year, with about $1.6 billion poured into small businesses there.
Raleigh tied with Jacksonville, Florida, for the fastest job growth in the U.S. at 3.8% — more than double the study's average of 1.7%.
Atlanta ranked as the No. 1 best city to start a business, with about 28.5 business applications per 1,000 residents filed between 2018 and 2022. Providence, Rhode Island was rated as the worst city for new businesses, with about 8.3 startup applications per 1,000 residents filed during that four-year period.
Home Bay says 20% of new businesses fail in their first year, a figure that climbs to 45% in the first five years. But even in a challenging economic period, U.S. residents filed a record 5.5 million in new business applications last year.
"Choosing the right location for a new business is imperative for entrepreneurs," Home Bay said in the report. "The best cities can help startups survive by creating an environment that attracts affordable skilled workers and boasts business-friendly tax laws and easy access to capital."
