Texas ranks among the 5 best states to start a business in 2025

Best for Biz

Texas has returned to the top 5 among best states to start a business. Photo via Getty Images

As one of the largest states in the U.S., it's no surprise Texas is big on business and entrepreneurship. Now the state is earning new praise among WalletHub's 2025 list of "Best & Worst States to Start a Business."

The Lone Star State claimed the No. 4 spot in the report's rankings, proving that Texas is in a much better business shape than it was last year when it earned No. 8 in WalletHub's annual report.

The study compared all 50 states across 25 metrics to determine the best places to start, grow, and find success with a new business. Factors that were considered include the number of startups per capita, job growth rates, financing accessibility measures, labor costs and corporate tax rates.

The three states to outperform Texas in the 2025 report are Florida (No. 1), Georgia (No. 2), and Utah (No. 3). Idaho rounded out the top five.

Across the study's three main categories, Texas performed the best in the "business environment" category, earning No. 1 nationally. This section compares the states based on five-year business survival rates, average business revenues growth and more.

Texas ranked No. 12 in the nationwide comparison of "access to resources" – which covers working age population growth, venture investment amounts per capita and other means – and earned a fair No. 34 in the report's "business costs" ranking.

But Texas can still do better with its business friendliness to reclaim a top-three overall ranking, which the state last earned in 2023.

WalletHub analyst Chip Lupo said in the report that it is imperative for potential new business owners to establish their enterprise in a place that can maximize their ability to succeed.

"Around half of all new businesses don’t survive five years, so the idea of becoming a business owner can be daunting, especially with the current high cost of living," Lupo said. "The best states have low corporate tax rates, strong economies, an abundance of reliable workers, easy access to financing and affordable real estate. On top of that, you’ll need to make sure you start in a place with an engaged customer base, if you’re operating locally."

Houston has also proven to be at the top of the destination list for entrepreneurs who are looking for their next venture.

The top 10 best states to start a new business in 2025 are:

  • No. 1 – Florida
  • No. 2 – Georgia
  • No. 3 – Utah
  • No. 4 – Texas
  • No. 5 – Idaho
  • No. 6 – Oklahoma
  • No. 7 – Nevada
  • No. 8 – Colorado
  • No. 9 – Arizona
  • No. 10 – Kentucky
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This story originally appeared on our sister site, CultureMap.

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The Bayou City ranks highly thanks to a high quality-of-living score, lack of a state income tax and state capital gains tax, and a state sales tax rate of 6.25 percent. Photo by Natalie Harms/InnovationMap

Houston scores top ranking of best cities for entrepreneurs

easy living

Houston joins Dallas and Austin in a new ranking of the 10 best U.S. cities for entrepreneurs to live.

Houston appears at No. 7 on the list, compiled by SumUp, which provides payment and banking services for businesses. In part, Bayou City ranks highly thanks to a high quality-of-living score. Houston also fares well due to the lack of a state income tax and state capital gains tax, and a state sales tax rate of 6.25 percent.

Here are the top 10 places in the U.S. for entrepreneurs to live, according to SumUp:

  1. New York City
  2. Chicago
  3. Miami
  4. Los Angeles
  5. Dallas
  6. Austin
  7. Houston
  8. Seattle
  9. Washington, D.C.
  10. Boston

SumUp, based in the United Kingdom, weighed 16 factors to come up with the ranking. These factors included tax rates, number of millionaires, internet speeds, and number of international airports.

Not surprisingly, the ranking factors featured a decidedly British slant. For instance, the ranking took into account Google and TikTok search volumes in the United Kingdom for “Moving to [city name].”

Of course, Houston offers more entrepreneurial advantages than the ones cited by SumUp. For example:

  • Rice University’s Jones Graduate School of Business ranks as the country’s No. 1 graduate entrepreneurship program, according to The Princeton Review and Entrepreneur magazine.
  • The University of Houston’s Cyvia and Melvyn Wolff Center for Entrepreneurship at the C.T. Bauer College of Business ranks as the No. 1 undergraduate entrepreneurship program, according to The Princeton Review and Entrepreneur magazine.
  • The George W. Bush Presidential Center awarded Houston the No. 6 spot on its 2024 ranking of the top U.S. metro areas for university innovation.
  • A 2023 ranking from the LendingTree personal finance website put Houston in 13th place among the U.S. metro areas where minority entrepreneurs are enjoying the most success.
    “Houston’s reputation for entrepreneurship is inextricably linked to the city’s diversity,” the Understanding Houston website notes.

“The growing populations in Houston from diverse backgrounds, namely immigrants and people of color, are not only the economic and cultural driving force for the evolution of our city, but also the future of our country.”

Megan Eddings shares the full entrepreneurial journey — from founding to a pandemic pivot and an exit — on the Houston Innovators Podcast. Photo courtesy of Megan Eddings

Houstonian shares journey of entrepreneurship from pivot to exit to focus on inspiring positivity

HOUSTON INNOVATORS PODCAST EPISODE 247

After years of tolling over her athleisure wear startup, Megan Eddings knew what her company needed for it to be successful, and she knew she wasn't the right person to do it.

Accel Lifestyle, a clothing brand based on Edding's patented antimicrobial Prema fabric, launched late in 2019 just ahead of boutique fitness studio craze was significantly affected by the pandemic. After pivoting to face masks, including manufacturing tens of thousands for the United States Military, Eddings says she went into the next few years with Accel being back on track to design stink-resistant workout clothing.

But Eddings knew the company needed a huge marketing push to make a splash in the direct-to-consumer world.

"The core of who I am is not a social media person," she says on the Houston Innovators Podcast. "That isn't my skillset. If you sell a product, one of the only ways to become wildly successful is to have an incredible marketing strategy that you need a lot of money to build and create. That is not something that I liked.

"I was so passionate about inventing something, but in order to really scale to the next level, I would have had to take on quite a bit of investment money," she continues.

The process of figuring this out wasn't fast — and it wasn't easy, Eddings says. It took a lot of soul searching and figuring out her strengths and what was right for her.

Eddings says she started considering B2B opportunities — some of which were with major retail brands — but these companies weren't willing to make the financial commitment to Accel or its Prema fabric. The one exception was Talbots, which agreed to stock Accel's clothing.

"It was like trying to fit a round peg into a square hole for a solid year," she says, explaining the emotional and mental toll the process took on her.

Eddings says that just as the opportunity for entrepreneurship found her — by way of her husband's sweaty workout gear she felt convinced she could improve — the next opportunity for Accel found her as well. Eddings was invited to film a segment featuring Accel's products on TV.

As great of an opportunity as it was to sell Accel's products, the segment would be even more meaningful to the company. Shortly after the it aired, a man reached out to Eddings with an acquisition offer from him and his two Australian colleagues who want to build a clothing brand as big as Patagonia, Eddings says.

"When the three men flew in, we had a three-hour lunch and I felt like I was sitting with friends," Eddings says. "I decided I was going to sell, and that was pretty much it." The terms of the deal were not disclosed.

Eddings, whose background in medical sales originally brought her to Houston 12 years ago, turned back to the business world — this time tackling another new industry: oil and gas. She's now the chief strategy officer of Houston-based consultancy New Wave Offshore Energy. And as much as she likes this new role, she says she's ready to add onto her plate a new venture taking her experience with making pivots and incorporating positivity into every asset of her life.

"What I've realized is everyone wants to be happier. When I would give talks about entrepreneurship, the No. 1 question I would get as a founder is 'how do you stay so positive?'" Eddings says.

With this inspiration, she's starting a podcast — The Pivot to Positivity — and has already filmed a pilot episode of a TV show with the same focus.

"Everyone just needs more joy in their life," Eddings says.

The grant from Rice is part of "several financial commitments" the university is making to support inclusivity at the Ion District. Photo courtesy of The Ion

Houston university awards grant to Texas accelerator to support sports tech

game on

Rice University awarded DivInc. an $800,000 grant this month to support its work in sports technology.

The Texas-based company, which operates numerous accelerators, focuses on BIPOC and female founders working toward social and economic equity through entrepreneurship. The grant from Rice is part of "several financial commitments" the university is making to support inclusivity at the Ion District.

DivInc runs its Sports Tech Accelerator out of The Ion, which recently named its latest cohort for the 2024 Sports Tech Accelerator.

“We’ve been in Houston since 2021, so we’re extremely honored and grateful to partner with Rice University,” Preston James, CEO and founder of DivInc, said in a statement. “Leveraging the top university sports management program in the U.S., Rice’s highly ranked sports medicine and sport analytics programs, we’re providing exceptional value to our portfolio of companies ... Sports tech is a vast and rapidly growing industry that represents a tremendous opportunity for diverse founders.”

Among the 10 companies selected for DivInc's current 12-week sports accelerator are a cash-back powered marketplace designed for the golf industry, a scouting automation software, an artificial intelligence company that collects real-time biometrics on athletes, and others.

Selected founders can receive up to $100,000 and access to curriculum, as well as mentorship from executives from the Houston Rockets, Houston Astros, San Antonio Spurs, Rice Alliance for Technology and Entrepreneurship, Mercury Fund, The Collectiv, HTX Sports Tech and more.

“We have strategically created one of the nation’s premier accelerator programs in Houston, Texas, dedicated to supporting BIPOC and women founders driving innovation in the sports industry by leveraging best practices and insights from stakeholders within the sports tech ecosystem,” Ashley DeWalt, DivInc’s managing director of startups and programs, said in a statement.

DivInc also launched its first DWeb for Social Impact Accelerator from the Ion last fall. The 12-week intensive hybrid program sponsored by Filecoin Foundation for the Decentralized Web, supported nine companies, all of whom integrate Web3 technologies into their impact entrepreneurship, and each of the companies selected were awarded a non-dilutive $10,000 grant to use during the course of the program.

University of Houston and Rice University have again been recognized for their programs for entrepreneurship. Photo courtesy of UH.edu

Houston universities maintain top spots on best entrepreneurship program rankings

top of class

Houston entrepreneurs, take note. Rice University and the University of Houston again are at the top of their class among the country’s best entrepreneurship programs.

Rice’s Jones Graduate School of Business appears at No. 1 on a new list from The Princeton Review of the best graduate programs for entrepreneurs. Rice also lands at No. 5 in Poets and Quants’ new ranking of the best online MBA programs, up from seventh place last year.

Meanwhile, UH’s C.T. Bauer College of Business shows up at No. 1 in The Princeton Review’s ranking of the best undergraduate programs for entrepreneurs.

For both Rice and UH, this marks the fourth consecutive year for No. 1 rankings in the graduate and undergraduate categories, respectively, from The Princeton Review.

“Appearing in the number one spot for the fourth year running cements reputationally what our students know innately, that Rice’s comprehensive suite of programming and education provides true practical value for founders and innovators,” Yael Hochberg, head of Rice’s Entrepreneurship Initiative, says in a news release.

The Princeton Review notes that graduates of Rice’s entrepreneurship program have raised more than $1.2 billion in funding for their startups over the past five years. During the same timeframe, UH entrepreneurship alumni have launched 779 startups.

UH’s Cyvia and Melvyn Wolff Center for Entrepreneurship “is the crown jewel of the Bauer College. But it is also a testament to the support we have received from the community,” Paul Pavlou, dean of the college, says in a news release. “In the last several years, we have been fortunate to receive numerous generous donations that are funding life-changing scholarships for our students, enabling us to recruit and train the next generation of successful entrepreneurs.”

Other Texas schools featured in The Princeton Review rankings include:

  • University of Texas at Austin, No. 5 for best graduate entrepreneurship program and No. 2 for best undergraduate entrepreneurship program
  • University of Texas at Dallas, No. 12 for best graduate entrepreneurship program and No. 25 for best undergraduate entrepreneurship program
  • Texas A&M University-College Station, No. 24 for best graduate entrepreneurship program and No. 36 for best undergraduate entrepreneurship program
  • Baylor University in Waco, No. 6 for best undergraduate entrepreneurship program
  • Texas Tech University in Lubbock, No. 12 for best undergraduate entrepreneurship program

“The rate of entrepreneurship and business creation has hit record highs in recent years,” says Jason Feifer, editor in chief of Entrepreneur magazine, which published The Princeton Review rankings. “We’re seeing more people seeking insight on how to become successful entrepreneurs. With this list of schools, aspiring entrepreneurs have a valuable reference for exploring schools that excel at helping young leaders expand their business skillsets and networks with an entrepreneurial ecosystem.”

Based on business activity in town, a new study ranks Houston as a top city for Asian Americans. Photo via Getty Images

Houston ranks as No. 3 city for Asian American entrepreneurs

diverse city

Known for its diversity, Houston ranks as the third best major metro area in the U.S. for Asian American entrepreneurs, according to a new study.

Personal finance website SmartAsset analyzed data for 52 of the largest metro areas to come up with the ranking. The analysis looked at nine metrics in three categories: prevalence of Asian-owned businesses, success of new businesses, and income and job security.

About 9 percent of the Houston metro area’s residents identify as Asian.

The SmartAsset study puts Houston in fifth place for the number of Asian-owned businesses (nearly 19,900) and in fourth place for the share of Asian-owned businesses (almost 17.9 percent) among all businesses. Furthermore, Houston ranks 14th for the increase (nearly 9.6 percent) in the number of Asian-owned businesses from 2017 to 2019.

Leading the SmartAsset list is the San Francisco metro area, followed by Dallas-Fort Worth. Austin comes in at No. 11 and San Antonio at No. 14.

The largest minority-owned business in the Houston area, as ranked by annual revenue, is Asian-owned private equity firm ZT Corporate.

Founded in 1997 by Chairman and CEO Taseer Badar, who was born in Pakistan, ZT Corporate is valued at more than $1 billion. ZT Corporate generates more than $900 million in annual revenue, according to the company, and employs over 3,000 people.

“As we look ahead, the vision for ZT Corporate is limitless. Our team will continue pushing boundaries and finding the bright spots in the economy that produce consistent financial gains for our investors,” Badar says in a news release marking his company’s 25th anniversary.

ZT Corporate’s flagship businesses are:

  • Altus Community Healthcare, a provider of health care services.
  • ZT Financial Services, a wealth management firm.
  • ZT Motors, which owns and operates auto dealerships. Last year, ZT Motors bought three Ron Carter dealerships in the Houston area.

“ZT Corporate is a vital asset to our citizens as a longtime local employer,” Houston Mayor Sylvester Turner says, “and has positively affected many lives through their health care organizations and philanthropic efforts.”

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Houston aerospace co. soars with first U.S. test flight of hypersonic engine

taking off

Houston-based Venus Aerospace successfully completed the first U.S. flight test of its proprietary engine at a demonstration at Spaceport America in New Mexico.

Venus’ next-generation rotating detonation rocket engine (RDRE) is supported by a $155,908 federal Small Business Innovation Research (SBIR) grant from NASA and aims to enable vehicles to travel four to six times the speed of sound from a conventional runway. The recent flight test was the first of an American-developed engine of its kind.

"With this flight test, Venus Aerospace is transforming a decades-old engineering challenge into an operational reality,” Thomas d'Halluin, managing partner at Airbus Ventures, an investor in Venus, said in a news release. “Getting a rotating detonation engine integrated, launch-ready, and validated under real conditions is no small feat. Venus has shown an extraordinary ability to translate deep technical insight into hardware progress, and we're proud to support their bold approach in their attempt to unlock the hypersonic economy and forge the future of propulsion."

Venus’ RDRE operates through supersonic shockwaves, called detonations, that generate more power with less fuel. It is designed to be affordable and scalable for defense and commercial systems.

The RDRE is also engineered to work with the company's air-breathing detonation ramjet, the VDR2, which helps enable aircraft to take off from a runway and transition to speeds exceeding Mach 6. Venus plans for full-scale propulsion testing and vehicle integration of this system. Venus’ ultimate goal is to develop a Mach 4 reusable passenger aircraft, known as the Stargazer M4.

"This milestone proves our engine works outside the lab, under real flight conditions," Andrew Duggleby, Venus co-founder and chief technology officer, said in the release. "Rotating detonation has been a long-sought gain in performance. Venus' RDRE solved the last but critical steps to harness the theoretical benefits of pressure gain combustion. We've built an engine that not only runs, but runs reliably and efficiently—and that's what makes it scalable. This is the foundation we need that, combined with a ramjet, completes the system from take-off to sustained hypersonic flight."

The hypersonic market is projected to surpass $12 billion by 2030, according to Venus.

"This is the moment we've been working toward for five years," Sassie Duggleby, CEO and co-founder of Venus Aerospace, added in the release. "We've proven that this technology works—not just in simulations or the lab, but in the air. With this milestone, we're one step closer to making high-speed flight accessible, affordable, and sustainable."

Houston-founded startup raises $1.2M and moves headquarters to Detroit

moving forward

Houston-founded ChurchSpace, known as the Airbnb for churches, has formed an official partnership with the City of Detroit and will relocate its headquarters.

The announcements come as the company successfully closed a $1.2 million oversubscribed funding round. The round was led by California-based Black Ops Ventures, with participation from Michigan Rise and Dug Song of Minor Capital, who is also the founder of the Song Foundation, another Michigan-based organization.

"This raise is more than a business milestone—it's a testament to what happens when strategy meets faith. In today's climate, raising capital takes grit and resilience—especially without deep networks or traditional access. By God's grace, doors have opened, and our mission is clearer than ever. Now, with capital in hand, we're building boldly toward a future where the Church isn't just surviving—but leading community transformation," Emmanuel Brown, co-founder and CEO of ChurchSpace, said in a statement.

In Detroit, ChurchSpace plans to activate underutilized church campuses as micro-logistics spaces for food distribution and retail partnerships, as well as last-mile delivery centers. To kick off its relocation, ChurchSpace will host a Detroit Pastor Meetup on July 19.

"We welcome ChurchSpace's investment in Detroit and the jobs and innovation it will bring," Detroit Mayor Mike Duggan added in the release. "Our faith community has long been a critical backbone of our neighborhoods. Through ChurchSpace's groundbreaking work, they will continue to be anchors of opportunity and resilience in our city's future."

ChurchSpace was originally founded to convert underutilized church real estate into event, meeting and commercial kitchen space to boost revenue and relieve financial burden while remaining compliant with IRS regulations for non-profits. The company participated in the inaugural cohort of the AWS Impact Accelerator for Black Founders, which included a pre-seed fundraising campaign and a $125,000 equity injection from Amazon in 2022. It was also one of two Houston companies to receive $100,000 as part of the Google for Startups Black Founders Fund that same year.

The company reports that its platform in Texas has generated up to $100,000 annually in new revenue that was reinvested into church ministries, food programs and community initiatives.

"What we built in Houston was more than technology—it was transformation. We expanded our purpose and packaged proven strategies to help churches thrive, transform communities, and even combat food insecurity," Day Edwards, co-founder and president of ChurchSpace, added in the statement. "Now, with prayer and the support of our team and investors, we're bringing that same impact to Detroit—to help churches, communities, and small businesses redefine pulpits and rediscover communal possibilities."

Houston space tech co. lands millions and more innovation news to know

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Editor's note: It's time to recap the top innovation news for the first half of May 2025. Our five most-read stories from May 1-15 include updates from Intuitive Machines and The Ion. Plus, driverless trucks hit the road from Houston to Dallas. Get all of the details below.

1. Houston space tech leader lands up to $10 million for Earth re-entry vehicle and lab

The Texas Space Commission has selected Houston's Intuitive Machines to develop a vehicle that will return lunar samples to Earth, along with an orbital fabrication lab. Photo courtesy Intuitive Machines.

Houston-based space technology, infrastructure, and services company Intuitive Machines has been awarded a state grant of up to $10 million to help develop an Earth re-entry vehicle and in-space biomanufacturing lab. The Texas Space Commission approved the grant, which is coming from the state’s Space Exploration and Research Fund. Intuitive Machines says the money will support its “critical risk-reduction platform” for returning lunar samples to Earth. The funding will go toward an early 12-month phase of the project. Continue reading.

2. 9 can't-miss Houston business and innovation events for May

Don't miss these May events — from an investor activation series to a crawfish cook-off. Photo courtesy Greentown Labs.

There's a lot to learn this month at events around Houston. Hear from AI and energy experts or gain insights into how to tap into funding at informative panels or sessions. Continue reading.

3. Autonomous truck company rolls out driverless Houston-Dallas route

Aurora began regular driverless deliveries between Houston and Dallas on April 27. Photo courtesy Aurora.

Houston is helping drive the evolution of self-driving freight trucks. In October, Aurora opened a more than 90,000-square-foot terminal at a Fallbrook Drive logistics hub in northwest Houston to support the launch of its first “lane” for driverless trucks—a Houston-to-Dallas route on the Interstate 45 corridor. Aurora opened its Dallas-area terminal in April and the company began regular driverless customer deliveries between the two Texas cities on April 27. Continue reading.

4. Texas-based 'DoorDash for laundry' startup tumbles into Houston market

The service has been a smash success in Austin. Courtesy photo

Laundry may seem like an endless task that piles up, but a new service offers a solution to overwhelmed Houston families. NoScrubs, an Austin-based home laundry pickup service has just expanded to Houston. Described by the company as "DoorDash — but for laundry," they wash customer's clothes at local laundromats and return them the same day, folded and ready to be put away. The service took off like gangbusters in Austin, making an expansion to the state's largest city an obvious choice. Continue reading.

5. New energy innovation and coworking spaces open at the Ion

The Oxy Innovation Center has opened at the Ion and Industrious' coworking space launches soon. Photo courtesy of The Ion

Houston-based Occidental officially opened its new Oxy Innovation Center with a ribbon cutting at the Ion. The opening reflects Oxy and the Ion's "shared commitment to advancing technology and accelerating a lower-carbon future," according to an announcement from the Ion. Oxy, which was named a corporate partner of the Ion in 2023, now has nearly 6,500 square feet on the fourth floor of the Ion. Rice University and the Rice Real Estate Company announced the lease of the additional space last year, along with agreements with Fathom Fund and Activate. Continue reading.

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