Initiatives that make up the U.S. startup economy may be small in scale, but they are large in number, increasingly diverse, and widely dispersed. Given the startup slump the economy has been experiencing during the past few years, we set out to identify where in the country entrepreneurs might find the best conditions for growing their businesses. We looked at the country’s 50 most populous urban centers, to identify the best cities for startups in the U.S.

Kansas City, MO

Kansas City ranked first for startup growth rate with an estimated year-over-year increase of 6.2% in the number of new startups in 2018 and ranked second for startup density. In 2018, out of the city’s total number of businesses of up to four employees, 15.6% were in existence for less than a year. Kansas City placed sixth for tech employment growth, boasting a 29% increase in computer, engineering, and science jobs over five years. Another important factor that bodes well for the KCMO startup scene is that the city ranks well among the most affordable U.S. office markets, as well as the least rent-encumbered, ranking third for rental affordability. However, the most recent report by local entrepreneurial network KCSourceLink found that, although the local innovative drive is strong, funding continues to be scarce for startups in their early stage. This might very well be why, despite the advantages it possesses, Kansas City ranked 13th for startup survival rate and 14th for nonemployer firm growth. Moreover, there are signs that tech-specialized labor pool is shrinking. According to Census data, there was a 1% five-year decrease in the number of Kansas City residents aged 25 and over that hold a bachelor’s degree or higher in Science and Engineering, which placed KC 19th for tech ed growth on our list.