NerdWallet Names Midland One of The Best Cities For Young Entrepreneurs

It’s not all about San Francisco and New York City, says NerdWallet, the website that analyzed American metropolitan areas and came up with a list of the top 10 cities for young entrepreneurs. The list includes some of the spots you’d expect: Denver, Colo.; Seattle, Wash.; and Austin, Texas.

But we were happily surprised to see Midland on the list, ranking No. 8 above Boston (No. 9) and Fargo, N.D. (No. 10).

So what earned Midland a spot on the list?

Many young entrepreneurs are looking at 2016 as the year to launch the businesses they’ve been dreaming about. With success stories like Slack and Snapchat as inspiration, the entrepreneurial path has seldom been more appealing to those just starting out.

Such optimism is understandable. It’s easier than ever to start a business, to get backers to invest in your dream and to find sources of small-business loans.

Even the workplace communities within cities are changing to accommodate entrepreneurs. Companies like WeWork offer short-term workspaces, reducing the required upfront capital and the headaches caused by managing an office. Young entrepreneurs in some cities have gone even further by combining their living and business spaces and moving into homes populated with other like-minded individuals. The New York Times dubbed these residences “Millennial communes.”

Some places are friendlier — and cheaper — than others to launch a business, especially if you’re just starting out in your career. We also factored in the population ages 25 to 34 and the education level of each city, because a young, local entrepreneurial community is most likely to thrive with more networking and knowledge-sharing opportunities. To find these places, NerdWallet analyzed 181 metropolitan areas in America, parsing data on the local business environment and economy from sources including the U.S. Small Business Administration, the U.S. Census Bureau, the U.S. Bureau of Labor Statistics and more.

According to NerdWallet, 16.9 percent of Midland’s population is between 25 to 34 years old, and there are 2.9 small businesses per 100 residents. Additionally, more than $6.7 million in Small Business Administration loans were funded per 100,000 residents in Midland, more than one quarter of the population has a bachelor’s degree or higher, median earnings clocking in at $52,261, and with 3.3 percent unemployment.

The key is to build a business around an educated population. “Many industries require an increasingly technical and skilled workforce,” NerdWallet says. Likewise, lower cost of living will attract younger populations because of lower operating costs.

“Many top cities for young entrepreneurs are on the expensive side, but three of the top 10 cities (Austin, Salt Lake City and Midland, Texas) offer costs of living below the national average,” NerdWallet stated. “By reducing living and office space costs, entrepreneurs have more cash to invest in their growing businesses.”

Here’s the full list of the top 10 cities for young entrepreneurs:

1. Austin-Round Rock, Texas

Percent of population ages 25-34: 17.5% (rank: No. 1)

SBA loans per 100,000 residents: $17,692,769 (rank: No. 5)

2. San Francisco-Oakland-Hayward, California

Median earnings: $61,810 (rank: No. 2)

Percent of residents with bachelor’s degree or higher: 45.9% (rank: No. 4)

3. Salt Lake City, Utah

SBA loans per 100,000 residents: $21,590,164 (rank: No. 2)

Percent of population ages 25-34: 16.3% (rank: No. 6)

4. Denver-Aurora-Lakewood, Colorado

SBA loans per 100,000 residents: $14,648,482 (rank: No. 13)

Percent of residents with bachelor’s degree or higher: 40.8% (rank: No. 13)

5. Minneapolis-St.Paul-Bloomington, Minnesota and Wisconsin

SBA loans per 100,000 residents: $15,957,600 (rank: No. 7)

Unemployment rate as of September 2015: 3.1% (rank: No. 10)

6. Seattle-Tacoma-Bellevue, Washington

Median earnings: $55,123 (rank: No. 6)

Percent of population ages 25-34: 16.0% (rank: No. 11)

7. Madison, Wisconsin

Unemployment rate as of September 2015: 2.7% (rank: No. 6)

Percent of residents with bachelor’s degree or higher: 44.7% (rank: No. 8)

8. Midland, Texas

Percent of population ages 25-34: 16.9% (rank: No. 3)

Small businesses per 100 residents: 2.90 (rank: No. 5)

9. Boston-Cambridge-Newton, Massachusetts and New Hampshire

Median earnings: $60,168 (rank: No. 3)

Percent of residents with bachelor’s degree or higher: 45.2% (rank: No. 6)

10. Fargo, North Dakota

Unemployment rate as of September 2015: 2.1% (rank: No. 2)

Percent of population ages 25-34: 16.3% (rank: No. 6)