Houston ranks among best U.S. metros to start a small business, per report

by the numbers

This is a Houston resident's sign to launch that small business they've been dreaming of. Photo by Mickey Dziwulski on Unsplash

Houstonians whose New Year's resolution is to start their own small business will be happy to learn they're in the right city to do it. Houston-The Woodlands-Sugar Land has been ranked among the 25 best metropolitan areas to start a small business in a new report.

The report by personal finance website The Credit Review placed Houston in the No. 22 spot, touting the city's rapid growth, its diverse economy, and its ever-expanding population as several attractive reasons for its rank.

Small business owners in Houston specifically thrive in the arts, entertainment, and recreation sectors, the report found. Houston has proved its big on business, as several major employers have invested in the city while earning high recognition for their efforts in improving the workplace atmosphere for employees.

With the shift to remote work, it's now much easier for Houston residents to launch their business than ever before, the report claims. But in order to ensure longevity with a small business, the study suggests launching the venture in a place with the right number of resources and connections.

"The more resources a small business owner has, the better chances they have to succeed," the report says. "This is why, despite the overall shift to a remote-centric world, geographic location matters more than ever for a small business’s long-term success."

Austin-Round Rock-Georgetown earned the gold medal as the No. 1 metro for starting a small business. The Central Texas region is also the No. 1 hotspot for businesses in the information services sector, and the arts, entertainment, and recreation industry.

Another thriving Texas metro that earned a spot in the top 10 is Dallas-Fort Worth-Arlington, claiming the No. 8 spot. Elsewhere in Texas, San Antonio-New Braunfels ranked below Houston as No. 32.

The top 10 U.S. metros for starting a small business are:

  • No. 1 – Austin-Round Rock-Georgetown, Texas
  • No. 2 – Provo-Orem, Utah
  • No. 3 – Raleigh-Cary, North Carolina
  • No. 4 – Salt Lake City, Utah
  • No. 5 – Boise, Idaho
  • No. 6 – Nashville-Davidson-Murfreesboro-Franklin, Tennessee
  • No. 7 – Jacksonville, Florida
  • No. 8 – Dallas-Fort Worth-Arlington, Texas
  • No. 9 – Charlotte-Concord-Gastonia, North Carolina-South Carolina
  • No. 10 – North Port-Sarasota-Bradenton, Florida

The report analyzed the top 100 U.S. metro regions across 10 factors to determine the rankings, including unemployment rates, growth rates, new business success rates, and more.

The full report can be found on thecreditreview.com.

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This article originally ran on CultureMap.

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The No. 1 city on the list was from Texas, but it wasn't Houston. Photo via Getty Images

Texas cities see mixed results on list of top markets to start a business

progress report

While the Lone Star State secured top marks for states to launch a company, Houston was a bit outpaced by two of its sister cities.

According to a study by The Credit Review, a personal finance website, Texas was one of the best states in which to start a small business in 2023. In fact, Austin was the No. 1 city in the list entitled "25 Best U.S. Metros to Start a Small Business in High-Growth Sectors," which came out at the end of November.

“There are so many reasons why Austin is the best place to start a small business that it would require another article to explain them all,” the article reads.

Austin grabbed the top spot as the best city to start a small business in America in the top five sectors, including arts, entertainment, and recreation; and information services.

But that’s not the only reason that Texas was a winner. Dallas was No. 8 on the list for its fast growth in the area of management of companies and enterprises, while Houston was No. 22.

On the other hand, McAllen and El Paso were among the worst places in the country to start a small business. With McAllen’s 29.3 percent poverty rate, it comes in last for the entire country.

The Credit Review, which hails from Austin, compared the 100 largest MSAs in the United States for fast-growth and small business-survivability indicators such as population change, GDP, and the state of fastest-growing business sectors based on growth projections for 2021-2031 in each MSA. The team’s sources include the U.S. census, U.S. Bureau of Labor Statistics, Tax Foundation, and U.S. Courts.

It's worth noting that Houston’s GDP per capita score was one of the highest on the list, 8.9 out of 10. (Austin’s was 9.3.) The metro area, which also included Sugarland and The Woodlands, was noted for its top sector, arts, and entertainment.

Earlier this year, Texas ranked highly on two separate lists evaluating the best states to start a business. In January, the state ranked No. 3 on WalletHub's annual report, and then in April, Texas cinched No. 3 on Credit on Tap's ranking.

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Biosciences startup becomes Texas' first decacorn after latest funding

A Dallas-based biosciences startup whose backers include millionaire investors from Austin and Dallas has reached decacorn status — a valuation of at least $10 billion — after hauling in a series C funding round of $200 million, the company announced this month. Colossal Biosciences is reportedly the first Texas startup to rise to the decacorn level.

Colossal, which specializes in genetic engineering technology designed to bring back or protect various species, received the $200 million from TWG Global, an investment conglomerate led by billionaire investors Mark Walter and Thomas Tull. Walter is part owner of Major League Baseball’s Los Angeles Dodgers, and Tull is part owner of the NFL’s Pittsburgh Steelers.

Among the projects Colossal is tackling is the resurrection of three extinct animals — the dodo bird, Tasmanian tiger and woolly mammoth — through the use of DNA and genomics.

The latest round of funding values Colossal at $10.2 billion. Since launching in 2021, the startup has raised $435 million in venture capital.

In addition to Walter and Tull, Colossal’s investors include prominent video game developer Richard Garriott of Austin and private equity veteran Victor Vescov of Dallas. The two millionaires are known for their exploits as undersea explorers and tourist astronauts.

Aside from Colossal’s ties to Dallas and Austin, the startup has a Houston connection.

The company teamed up with Baylor College of Medicine researcher Paul Ling to develop a vaccine for elephant endotheliotropic herpesvirus (EEHV), the deadliest disease among young elephants. In partnership with the Houston Zoo, Ling’s lab at the Baylor College of Medicine has set up a research program that focuses on diagnosing and treating EEHV, and on coming up with a vaccine to protect elephants against the disease. Ling and the BCMe are members of the North American EEHV Advisory Group.

Colossal operates research labs Dallas, Boston and Melbourne, Australia.

“Colossal is the leading company working at the intersection of AI, computational biology, and genetic engineering for both de-extinction and species preservation,” Walter, CEO of TWG Globa, said in a news release. “Colossal has assembled a world-class team that has already driven, in a short period of time, significant technology innovations and impact in advancing conservation, which is a core value of TWG Global.”

Well-known genetics researcher George Church, co-founder of Colossal, calls the startup “a revolutionary genetics company making science fiction into science fact.”

“We are creating the technology to build de-extinction science and scale conservation biology,” he added, “particularly for endangered and at-risk species.”

Houston investment firm names tech exec as new partner

new hire

Houston tech executive Robert Kester has joined Houston-based Veriten, an energy-focused research, investment and strategy firm, as technology and innovation partner.

Kester most recently served as chief technology officer for emissions solutions at Honeywell Process Solutions, where he worked for five years. Honeywell International acquired Houston-based oil and gas technology company Rebellion Photonics, where Kester was co-founder and CEO, in 2019.

Honeywell Process Solutions shares offices in Houston with the global headquarters of Honeywell Performance Materials and Technologies. Honeywell, a Fortune 100 conglomerate, employs more than 850 people in Houston.

“We are thrilled to welcome Robert to the Veriten team,” founder and CEO Maynard Holt said in a statement, “and are confident that his technical expertise and skills will make a big contribution to Veriten’s partner and investor community. He will [oversee] every aspect of what we do, with the use case for AI in energy high on the 2025 priority list.”

Kester earned a doctoral degree in bioengineering from Rice University, a master’s degree in optical sciences from the University of Arizona and a bachelor’s degree in laser optical engineering technology from the Oregon Institute of Technology. He holds 25 patents and has more than 25 patents pending.

Veriten celebrated its third anniversary on January 10, the day that the hiring of Kester was announced. The startup launched with seven employees.

“With the addition of Dr. Kester, we are a 26-person team and are as enthusiastic as ever about improving the energy dialogue and researching the future paths for energy,” Holt added.

Kester spoke on the Houston Innovators Podcast in 2021. Listen here

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