A new study puts Minnesota in the top 10 U.S. states to launch a startup in, owing partly to a strong survival rate among fledgling businesses here.
The study, conducted by Lensa, a job search engine that helps provide resources for job seekers, ranked all 50 U.S. states according to these factors: new business applications, business survival rate, rate of new entrepreneurs, corporate tax rate, share of college-educated population, labor costs, cost-of-living index score, venture capital disbursed per $1 million of GDP and a startup score out of 10.
Minnesota has some weak spots compared to its competition: It has relatively few new entrepreneurs and new business applications (just 64,638 of the latter in 2021, which is below average and far below the 500,000 applications in California.)
However, Minnesota had one of the highest business survival rates (8.68%), with only Massachusetts beating us at 9.34%.
Lensa gave Minnesota an overall ranking of 5.87 out of 10. Minnesota's other metrics included 36.8% of the population with a college education, a 100 cost-of-living index score, and $4,370 venture capital disbursed per $1 million of GDP.
Texas, the winner of the study, scored 7.09 out of 10 with 492,243 new business applications. After Texas, Georgia came in second with an overall score of 6.68 and 326,460 new business applications. It has one of the worst corporate taxes with a rate of 5.93%, but was offset by a low cost-of-living index score at 88.8.
The third-ranked state, California, scored 6.56 with highest number of new business applications at 518,001. Despite being one of the fastest-growing new business climates for new business owners, the state's ranking was hurt by tax metrics..
The study also found that Minnesota neighbor North Dakota ranked the worst out of all U.S. states with an overall score of 2.88 and only 7,984 new business applicants.
