Starting up a new tech company is rarely easy. You need to deal with the investment plan and figure out how to develop your business. Additionally, you need to consider marketing and other details. Throughout all of this, budget, manpower, and bureaucracy will play a significant role. And all three of those are predicated on the state where you chose to set up your company. With this in mind, we’ve come up with our pick of the best states for tech startups. After reading the following article, you will, hopefully, be able to choose the perfect place and set up your startup successfully.
Our pick of the best states for tech startups
What makes a state suitable for a startup? Well, different aspects can come into play. Large startups benefit from having a substantial pool of young professionals at their disposal. While smaller startups usually benefit more from tax breaks and other financial perks. All things considered, there is no one best state for tech startups, as they can be so drastically different. So, we advise you to first carefully consider what your startup requires and in what priority. That way, you can easily sort through potential states and settle on one suitable for your company.
California
Let’s get the most well-known startup state out of the way. The mere fact that Silicon Valley is situated in California makes it one of the top states for startups. By running your company here, you have the privilege of being next to big tech companies like Google, Apple, and Hewlett-Packard. The presence of these companies brings a large number of young professionals all yearning to build a career for themselves. This presence of talent and entrepreneurship is well-noticed by venture capitalists who heavily invest in various projects. If you plan on settling in CA, you should be aware of:
- Tech Coast Angels
- Upfront Venture
- Wavemaker Partners
- Third Wave Digital
The only potential downside of California is that it can be relatively expensive. Not only is it costly to start a company, but living costs can add up as well, especially in the LA area. So, if you are considering LA as your future location, we advise you to carefully calculate your expenses and come with a prepared budget. Starting a business in LA might seem scary but, with a good plan, it doesn’t have to be.
Texas
While it has always been a decent state for tech startups, Texas has recently become one of the top contenders for upcoming entrepreneurs. Sure, it is behind California when it comes to the talent pool and the vicinity of large companies. But, once you consider how cheaper Texas is for both living and running a company, you’ll soon see why so many tech startups decide to move here.
The business-friendly climate, the lack of state income tax, and the relatively low costs of living are the reasons why large companies like Oracle move here. Considering the changes that COVID-19 brought to the tech industry in general, we wouldn’t be surprised if even more companies decided that Texas is the state for them. So, if moving to Texas sounds like a good idea, we suggest that you tackle it as soon as possible.
New York
When it comes to state-wide investments in tech startups, you can hardly find a state more applied than New York. Besides standard investments, the state of New York is currently trying to undo the harm to the economy caused by COVID-19. One such program is the BRIDGES, which contains $10 million solely reserved for tech startup support. And considering the New York taxing system, you can run your business relatively cheaply as an LLC.
Besides said benefits, it is also important to mention that New York has a massive pool for you to hire from. Large companies like Facebook and Amazon are situated in New York. They draw in fresh graduates regularly and motivate them to learn and develop new skills. You also have companies like Slack, Compass, Adobe, and Square running their business for New York. So, if you need talented employees for your startup, New York is the state to check out.
Massachusetts
The last state we will mention usually ranks top among states with the largest and deepest talent pool for tech startups. Namely, Massachusetts houses some of the best tech minds in the country. While you don’t have to go through college to work in tech, it certainly does help. And seeing that Massachusetts has both MIT and Harward, it is no surprise that so many young professionals come from here. This is why talent scouts for large companies usually spend most of their time in Massachusetts.
Large tech companies like Dell EMC and LogMein even choose to run their businesses in Massachusetts to employ new professionals relatively easily. Therefore, if you feel that your startup will require considerable staffing to get off the ground, we suggest that you make Massachusetts your base.
Final thoughts on choosing a state for your tech startup
As we’ve said before, there is no ideal state for tech startups. Every state has pros and cons that you need to weigh out and prioritize. For example, if you are an online startup with a limited budget, we suggest that you head for Texas. After all, you can set up and run your business there for a considerably lower cost. On the other hand, California might be the best solution if you have a developed idea and the necessary funding to present it. There you can find a venture capitalist to support you and see that your vision comes to fruition.
All things considered, you want to clearly outline what your top needs are. That way, you can pick among the best states for tech startups and settle on the one that will most likely aid you.
Thanks to Ciryl Lewis for contributing this informative article to Leisure Freak.
Author Bio: After working in tech for 20 years, Ciryl Lewis has decided to relocate closer to nature and provide consult-oriented services. He now helps tech startups design their growth program and give them valuable tips on what to do and what to avoid.