Madison and Milwaukee are both among the top 20 best Midwest cities for startups, according to an annual list of 59 cities from Chicago's M25, a venture firm that focuses on early-stage technology companies based in the Midwest.
Madison ranked No. 9, falling one spot compared with last year's list, while Milwaukee maintained its No. 13 ranking. Green Bay ranked No. 35, Beloit ranked No. 40, Eau Claire ranked No. 44. and La Crosse ranked No. 50.
Since M25 began compiling the list in 2017, Madison's highest ranking was No. 7 in 2019, and Milwaukee ranked No. 10 in 2017. The list considers 27 variables that measure startup activity, access to resources and overall business climate.
On this year's list, Milwaukee scored highly for employee loyalty, as measured by the average tenure among developers, as well as its government programs. Madison ranked well for its startup density, educated workforce and government programs, according to a breakdown of the rankings.
M25, which compiled the list, has invested in two Wisconsin companies: Waukesha's intelligent spaces software firm Scanalytics Inc. and Madison's health data software company EnsoData Inc.
The top five cities on this year's list are unchanged from 2020's rankings: Chicago, Minneapolis, Pittsburgh, Indianapolis and St. Louis stand as the top Midwest cities again this year.
Here are the top 20 Midwest cities for startups, according to M25.
- Chicago, IL
- Minneapolis, MN
- Pittsburgh, PA
- Indianapolis, IN
- St. Louis, MO
- Columbus, OH
- Detroit, MI
- Ann Arbor, MI
- Madison, WI
- Cincinnati, OH
- Cleveland, OH
- Kansas City, MO
- Milwaukee, WI
- Louisville, KY
- Lafayette, IN
- Bloomington, IN
- Omaha, NE
- Champaign, IL
- Lincoln, NE
- Des Moines, IA
You can see the entire M25 ranking here.
M25 compiled its rankings based on 27 variables across three categories:
- Startup activity (42% weight): This category took into consideration the number of active startups, startup formation growth, number of exits, and the scale of exits and large fundraising rounds.
- Access to resources (40.5% weight): This considered the amount of venture capital dollars that local startups have raised, as well as the number of local investors, incubators and accelerators, universities, government support, and access to quality talent.
- Business climate (17.5% weight): This looked at the cost of living, labor costs and business tax friendliness.
Venture funding is up across the country, and the Midwest is no exception. The amount of venture capital invested in the region has nearly doubled over the last 12 months compared with the same period last year, climbing from $10.1 billion in '19-'20, to $19.8 billion in '20-'21, according to M25.
