Study: Texas is the best state to launch a startup – Dallas Business Journal

Texas tops a list of the best states to launch a startup. Here’s why.

The Lone Star State leads the nation as the best place to launch a startup, according to a report from Lensa.

For this study, Lensa, which a job search engine that helps provide opportunities and careers for job seekers, took into the following nine factors to rank all 50 U.S. states: 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.

Texas scored a 7.09 out of 10 and witnessed 492,243 new business applications in 2021. The state also ranked among the top 10 states for a low corporate tax rate of 3.95%, which would help benefit small business owners to maximize profits.

Texas also tops the list with its cost of living score of 92.1 and with a business survival rate of 5.62%. The state’s new entrepreneur rate is at 0.37% and had a 30.7% share of a college-educated population. This also includes the added labor cost of $32,177 and a venture capital disbursed per $1 million of GDP of $3,000.

Following behind, Georgia ranked No. 2 with an overall score of 6.68 and 326,460 new business applications in 2021. While the state has a lively business environment, it has one of the worst corporate taxes with a rate of 5.93%. Despite its high corporate tax rate, the index score of the cost of living is quite low (88.8).

The business survival rate is 4.8%, new entrepreneur rate of 0.47%; share of college-educated population at 32.2%; labor costs of $32,427 and its venture capital disbursed per $1 million of GDP of $3,824.

California with 6.56 came in third, bringing in a total of 518,001 new business applications in 2021. While being one of the fastest-growing new business climates for new business owners, California’s corporate tax rate is 4.92%, putting the state at a high for most expensive based on its cost of living score of 142.2.

Illinois ranked No. 4 and North Carolina ranked No. 5.

While the top 10 states continue to be the best places for business startups, there were several states that failed to achieve an environment for early-stage companies to thrive.

North Dakota with 2.88 ranked the worst out of all U.S. states for new business owners, receiving just 7,984 new business applicants. The state has a high tax corporate rate of 5.86%, putting them in the bottom 10 for the highest tax rates.

West Virginia ranked as the second-worst state for startups, while Rhode Island ranked No. 3; Wyoming ranked No. 4; and Hawaii ranked No. 5.