Madison is best ‘untapped’ city for startups

Ask where the best U.S. cities are to launch a startup, and most people will think of someplace on the coast. But go beyond the obvious venture capital hubs, and one Wisconsin city rises to the top, according to a new report.

The city of Madison — home of the University of Wisconsin-Madison — was rated as the best “untapped city” for startups by Fundera, a financial site serving small businesses.

So-called startup culture is primarily centered in a few regions – with the Silicon Valley Bay Area accounting for 45% of total U.S. venture capital investments – and even “second-tier” startup cities, such as Portland and Austin, are becoming costly, according to Fundera.

So to determine the best untapped cities for startups, Fundera looked at data for 50 midsized cities, with populations under 500,000, and measured each city’s access to talented labor; average labor and office space costs; cost of living; and access to a larger startup ecosystem.

The data comes from the U.S. Census Bureau, LoopNet and PriceWaterhouseCoopers.

Madison ranked No. 1 because of its well-educated population (57% of residents with a bachelor’s degree or higher) and low office rental prices. Madison also fared well with the demographics. The city has the highest concentration of millennials compared with other cities in the country, Fundera said, which makes it a good place for young startup founders.

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