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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10 promising Houston startups that made headlines in 2025

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Editor's note: As we reflect on 2025, we're looking back at the stories and startups that made waves in Houston's innovation scene. These 10 startups reached memorable milestones, won prestigious awards, found creative solutions, and disrupted their industries.

Persona AI: Houston humanoid robotics startup inks new deal to deploy its rugged robots

A concept design rendering of Persona AI's humanoid robot. The company is expanding at the Ion and plans to deliver prototype humanoids by the end of 2026 for complex shipyard welding tasks. Rendering courtesy Persona AI.

Persona AI is building modularized humanoid robots that aim to deliver continuous, round-the-clock productivity and skilled labor for "dull, dirty, dangerous, and declining" jobs. The company was founded by Houston entrepreneur Nicolaus Radford, who serves as CEO, along with CTO Jerry Pratt and COO Jide Akinyode. It raised $42 million in pre-seed funding this year and is developing its prototype of a robot-welder for Hyundai's shipbuilding division, which it plans to unveil in 2026. The company won in the Deep Tech Business category at this year's Houston Innovation Awards. Continue reading.

Rheom Materials: Houston startup unveils its innovative leather alternative at the rodeo

Rheom Materials presented its bio-based alternative, Shorai, a 93 percent bio-based leather, at the rodeo and plans to scale it up this year. Photos courtesy Rheom Materials

Rheom Materials presented its scalable, bio-based alternative known as Shorai, a 93 percent bio-based leather, through two custom, western-inspired outfits that showed off cowboy flair through a sustainable lens at the Houston Livestock Show and Rodeo earlier this year.

Next up, the company said it aimed to scale production of Shorai, the Japanese word for “future,” at a competitive price point, while also reducing its carbon footprint by 80 percent when compared to synthetic leather. The company also made a large-scale production partnership with a thermoplastic extrusion and lamination company, Bixby International, this year. Continue reading.

Koda Health: Houston digital health platform Koda closes $7 million funding round

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Houston-based digital advance care planning company Koda Health closed an oversubscribed $7 million series A funding round this year. The round, led by Evidenced, with participation from Mudita Venture Partners, Techstars and Texas Medical Center, will allow the company to scale operations and expand engineering, clinical strategy and customer success. Koda Health, saw major growth this year by integrating its end-of-life care planning platform with Dallas-based Guidehealth in April and with Epic Systems in July. The company won the Health Tech Business category at the 2025 Houston Innovation Awards. Continue reading.

Veloci Running: Student-led startup runs away with prestigious prize at Rice competition

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Veloci Running took home the first-place prize and $50,000 at the annual Liu Idea Lab for Innovation and Entrepreneurship's H. Albert Napier Rice Launch Challenge. The company was founded by Tyler Strothman, a former track and field athlete and senior at Rice, majoring in sport management. Inspired by the foot pain he suffered due to the narrow toe boxes in his running shoes, Strothman decided to create a naturally shaped shoe designed to relieve lower leg tightness and absorb impact. Additional prize winners included SteerBio, Kinnections, Labshare and several others. Continue reading.

Square Robot Inc.: Houston robotics co. unveils new robot that can handle extreme temperatures

The new robot eliminates the need for humans to enter dangerous and toxic environments. Photo courtesy of Square Robot

Houston- and Boston-based Square Robot Inc.'s newest tank inspection robot became commercially available and certified to operate at extreme temperatures this fall. The new robot, known as the SR-3HT, can operate from 14°F to 131°F, representing a broader temperature range than previous models in the company's portfolio. According to the company, its previous temperature range reached 32°F to 104°F. The company also announced a partnership with downstream and midstream energy giant Marathon Petroleum Corp. (NYSE: MPC) last month. Continue reading.

Bot Auto: Houston autonomous trucking co. completes first test run without human intervention

Bot Auto completed its first test run without human assistance in Houston. Photo courtesy Bot Auto.

Houston-based Bot Auto, an autonomous trucking company, completed its first test run without human assistance earlier this year. Bot Auto conducted the test in Houston. The transportation-as-a-service startup added that this milestone “serves as a validation benchmark, demonstrating the maturity and safety of Bot Auto’s autonomy stack and test protocols.” This summer, founder Xiaodi Hou told the Front Lines podcast that Bot Auto had raised more than $45 million. Continue reading.

Nomad: Screen-free hiking app developed in Houston earns 'Best of the Best' award

NOMAD aims to help hikers stay in the moment while still utilizing technology. Photo courtesy UH.

An AI-powered, screen-free hiking system developed by Varshini Chouthri, a recent industrial design graduate from the University of Houston, received this year's Red Dot’s “Best of the Best” award, which recognizes the top innovative designs around the world. Known as NOMAD, the system aims to help users stay in the moment while still utilizing technology. Continue reading.

Little Place Labs, Helix Earth, Tempest Droneworx: Houston startups win big at SXSW 2025 pitch competition

Two Houston startups won the SXSW Pitch showcase in their respective categories. Photo via Getty Images

Houston had a strong showing at the SXSW Pitch showcase in Austin this year, with several local startups claiming top prizes in their respective categories.

Little Place Labs, a Houston space data startup, won the Security, GovTech & Space competition. Clean-tech company Helix Earth, which spun out of Rice University and was incubated at Greentown Labs, won in the Smart Cities, Transportation & Sustainability contest. Tempest Droneworx, a Houston-based company that provides real-time intelligence collected through drones, robots and sensors, won the Best Speed Pitch award. Continue reading.

6 Houstonians named to prestigious national group of inventors

top honor

Six Houston scientists and innovation leaders have been named to the National Academy of Inventors’ newest class of fellows. The award is the highest professional distinction awarded to academic inventors by the NAI.

The 2025 class is made up of 169 fellows who hold more than 5,300 U.S. patents, according to the organization. The group hails from 127 institutions across 40 U.S. states.

The Houston-based inventors are leading fields from AI to chemistry to cancer research.

“NAI Fellows are a driving force within the innovation ecosystem, and their contributions across scientific disciplines are shaping the future of our world,” Paul R. Sanberg, president of the National Academy of Inventors, said in a news release. “We are thrilled to welcome this year’s class of Fellows to the Academy. They are truly an impressive cohort, and we look forward to honoring them at our 15th Annual Conference in Los Angeles next year.”

The 2025 list of Houston-based fellows includes:

Vineet Gupta, Vice President for Innovation, Technology Development and Transfer at the University of Texas Medical Branch
Eva Harth, chemistry professor at the University of Houston
Dr. Raghu Kalluri, Professor and Chairman of the Department of Cancer Biology at The University of Texas MD Anderson Cancer Center
Sanjoy Paul, Executive Director of Rice Nexus and AI Houston and Associate Vice President for Technology Development at Rice University
Dr. Jochen Reiser, President of the University of Texas Medical Branch and CEO of UTMB Health System
Todd Rosengart, Professor and Chair of the Department of Surgery at Baylor College of Medicine

"It is a great honor to be named a Fellow of the NAI. It is deeply gratifying to know that the work my students and I do — the daily push, often in small steps — is seen and recognized," Harth added in a news release from UH.

The 2025 fellows will be honored and presented with their medals by a senior official of the United States Patent and Trademark Office at the NAI Annual Conference this summer in Los Angeles.

Money talks: Top Houston innovation grant and gift news of 2025

Year in Review

Editor's note: As 2025 comes to a close, we're looking back at the stories that defined Houston innovation in 2025. Below, we recap the biggest Houston innovation grant funding and gift news of the year:

Houston scores $120M in new cancer research and prevention grants

The Cancer Prevention and Research Institute of Texas has doled out 73 more grants to health care systems and companies in the state. Carter Smith/Courtesy of MD Anderson

In November 2025, the Cancer Prevention and Research Institute of Texas granted more than $120 million to Houston organizations and companies as part of 73 awards issued statewide. The funds were part of nearly $154 million approved by the CPRIT's governing board earlier that month, bringing the organization's total investment in cancer prevention and research to more than $4 billion since its inception.

TMC lands $3M grant to launch cancer device accelerator

Recent funding from CPRIT will help launch the new Accelerator for Cancer Medical Devices. Photo via TMC

In September 2025, a new business accelerator at Houston’s Texas Medical Center received a nearly $3 million grant from the Cancer Prevention and Research Institute of Texas. The CPRIT grant, awarded to the Texas Medical Center Foundation, will help launch the Accelerator for Cancer Medical Devices. The accelerator will support emerging innovators in developing prototypes for cancer-related medical devices and advancing them from prototype to clinical trials.

Houston foundation grants $27M to support Texas chemistry research

Houston's Welch Foundation has awarded more than 80 grants to support chemical research and careers in Texas for 2025. Photo via Getty Images

Houston-based The Welch Foundation doled out $27 million in its June 2025 round of grants for chemical research, equipment and postdoctoral fellowships. $25.5 million was allocated for the foundation's longstanding research grants, which provide $100,000 per year in funding for three years to full-time, regular tenure or tenure-track faculty members in Texas. The foundation made 85 grants to faculty at 16 Texas institutions for 2025.

Houston Methodist receives $25M gift, renames department of medicine

Houston Methodist will rename its department of medicine the Houston Methodist Charles W. Duncan Jr. Department of Medicine. Photo courtesy Houston Methodist.

In August 2025, Houston-based nonprofit The Duncan Fund awarded a $25 million gift to Houston Methodist's department of medicine to establish new endowed fellowships, streamline complex care and bring artificial intelligence into the fold to develop more personalized treatment plans. In turn, the health care system announced that it would rename the department the Houston Methodist Charles W. Duncan Jr. Department of Medicine.

Houston foundation doles out $700K for Texas chemical research

The Welch Foundation has awarded funding through two of its newest grant programs. Photo via Getty Images.

Houston-based The Welch Foundation issued $700,000 in additional funding in August 2025 to support chemical research through two of its newest grant programs. The foundation named the recipients of its Welch eXperimental (WelchX) Collaboration Retreat and Pilot Grants and the Welch Postdoctoral Fellows of the Life Sciences Research Foundation Grants. The WelchX grants were awarded to teams of two Texas researchers who presented "innovative and collaborative ideas" addressing challenges in the clean energy space, according to the foundation.

CPRIT grants $22M to bring top cancer researchers to Houston

CPRIT recently granted $93 million to 61 organizations and scientists, including many in Houston, to advance cancer research. Carter Smith/Courtesy of MD Anderson

In June 2025, it was announced that several prominent cancer researchers would be coming to the Houston area thanks to $22 million in grants awarded by the Cancer Prevention and Research Institute of Texas (CPRIT). The biggest CPRIT recruitment grant — $6 million — went to genetics researcher Jean Gautier. Gautier, a professor of genetics and development at Columbia University’s Institute for Cancer Genetics, joined the University of Texas MD Anderson Cancer Center to continue his research.

Baylor, Rice win $500,000 to launch humanities-driven health AI center

A new center being developed by Baylor College of Medicine and Rice University aims to develop ethically responsible and trustworthy AI for health care. Photo via Getty Images.

In August 2025, Baylor College of Medicine and Rice University announced they had been awarded a $500,000 grant from the National Endowment for the Humanities (NEH) to create the Center for Humanities-based Health AI Innovation (CHHAIN).

Baylor center receives $10M NIH grant to continue rare disease research

BCM's Center for Precision Medicine Models has received funding that will allow it to study more complex diseases. Photo via Getty Images

Baylor College of Medicine’s Center for Precision Medicine Models received a $10 million, five-year grant from the National Institutes of Health in November 2025, which will allow it to continue its work studying rare genetic diseases. The Center for Precision Medicine Models creates customized cell, fly and mouse models that mimic specific genetic variations found in patients, helping scientists to better understand how genetic changes cause disease and explore potential treatments.

Houston billionaire benefactors will donate almost entire fortune to charity

Pictured: Nancy and Richard Kinder. Photo by Michelle Watson/Catchlight Group

Houston billionaires Rich and Nancy Kinder announced plans to donate an astounding 95% of their multi-billion-dollar wealth to charities. The news came as the Kinder Foundation announced an $18.5 million expansion project for Emancipation Park in the heart of Third Ward. That historic park was founded by slaves in 1872.

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