Entrepreneurial energy remains high across the United States, with over 5.2 million new business applications filed in 2024.
A new report by financial software firm Wave has revealed a surprising picture of where startups are thriving — and many of the most successful states aren’t the usual suspects like California or New York.
Wave’s study ranked all 50 US states using six weighted factors: new business applications, existing business density, opportunity-driven entrepreneurship, job creation by startups, first-year survival rates, and local search interest in “how to start a business.” All metrics were adjusted per 100,000 residents to ensure fair comparison, resulting in an overall “Entrepreneurship Strength Index.”
Wyoming ranked No. 1, outperforming all other states in entrepreneurship. The state registered an astonishing 10,000 business applications per 100,000 people in 2024 — over six times the national average. With 8,600 active businesses and 85% of entrepreneurs launching ventures by choice rather than necessity, Wyoming also boasts one of the highest startup survival rates at 77%. Local interest in entrepreneurship is equally strong, with the highest number of monthly “how to start a business” searches per capita.
Montana came second, driven by strong job creation and solid survival rates. The state saw 2,400 applications, nearly 6,700 businesses, and posted an impressive 81% survival rate for new firms. Importantly, 76% of new businesses were founded out of entrepreneurial desire, not economic desperation.
Utah took third place with the nation’s highest rate of opportunity-driven entrepreneurship: 91%. Despite a smaller business count per capita (4,500), Utah maintained high levels of job creation and posted a strong 82% startup survival rate.
Delaware secured fourth place thanks to high business formation (5,400 applications), strong survival rates (82%), and a motivated founder base. Colorado followed in fifth, buoyed by strong interest in business formation and a robust job creation profile.
Florida ranked sixth overall, maintaining a large pool of entrepreneurs and active companies. With 2,700 business applications and one of the densest populations of active companies (6,700), Florida’s 80% startup survival rate and 4% startup job creation rate cemented its status as an entrepreneurial stronghold.
Idaho came in seventh, with 89% of business owners motivated by opportunity — behind only Utah and North Dakota. With solid company density and strong job creation, Idaho continues to punch above its weight.
California, a perennial innovation hub, ranked eighth — notable more for its economic impact than startup volume per capita. It had the highest job creation rate by startups at 4.3%, and a leading 83% startup survival rate. While it trails smaller states in business density, California’s startup quality and economic influence remain unmatched.
Why smaller states lead
“The study highlights that smaller states consistently rank higher in business formation and survival rates compared to larger population centers,” said a spokesperson for Wave. “States where people start businesses out of passion — not necessity — tend to perform better across the board.”
Interestingly, Nevada, despite ranking tenth, posted the highest startup survival rate at 83%. North Dakota tied Utah for the highest percentage of opportunity-driven founders (91%).
Wave’s findings also show that local business curiosity is a strong indicator of entrepreneurial strength. Colorado, for instance, ranks second in Google searches per capita for “how to start a business,” a sign of high local engagement.
While larger states like California and Florida remain innovation hubs, it’s the smaller, often overlooked states that are proving to be the most fertile ground for new businesses. With high survival rates, strong support ecosystems, and lower barriers to entry, these regions offer an appealing alternative for entrepreneurs seeking opportunity, resilience, and community support.
