Why Twin Cities Lag In Startups
- A national report ranked Minneapolis–St. Paul low for new business startups, highlighting local challenges for entrepreneurs. - Key metrics cited include low startup density and weaker early-stage funding compared with peer metros. - Economic leaders say targeted incentives and support networks could boost entrepreneurship in the Twin Cities (patch.com).
Minneapolis and St. Paul landed near the bottom of WalletHub’s 2026 ranking of large U.S. cities for starting a business: Minneapolis at No. 63 and St. Paul at No. 82 out of 100. (wallethub.com) WalletHub published the ranking on April 20 and scored cities across 19 measures, including five-year business survival, labor costs and office-space affordability. Florida cities took five of the top 10 spots, while the Twin Cities trailed much of the field. (wallethub.com) The low finish points to a split picture in the Twin Cities economy. Greater Minneapolis–Saint Paul says the region is strong on talent and major industries, but its 2025 regional dashboard says it still lags on growth and innovation. (greatermsp.org) Minnesota’s own business groups have been making a similar case for several years. A Minnesota Chamber Foundation report said the state has long trailed the nation in new employer businesses per capita and ranked 31st on that measure in 2019. (mnchamber.com) That same report described a pandemic-era jump in entrepreneurial activity, with new business applications rising 26% in 2020 and 2021. It also said Minnesota startups raised a record $1.5 billion in 2020 and closed a record 175 venture capital deals in 2021. (mnchamber.com) The region’s backers argue the Twin Cities are not short on big-company muscle. Technical.ly, citing a Nasdaq Entrepreneurial Center report, said Minneapolis–St. Paul ranks No. 1 per capita for Fortune 500 headquarters and performs well at producing high-growth entrepreneurs relative to its size. (technical.ly) But that same analysis said the weak spot is early money. It called for more pre-seed checks, more small-ticket lending and faster ways for startups to win pilot projects from large local companies. (technical.ly) State data also shows the region has assets that usually help founders. The Minnesota Department of Employment and Economic Development compares Minneapolis–St. Paul with peer metros on business climate, labor, innovation, education and quality of life, and Greater MSP reports $1.47 billion in annual venture capital and net in-migration of 7,814 people ages 25 to 34. (mn.gov) (greatermsp.org) The gap, then, is less about whether the Twin Cities can produce companies than how often residents start them and how easily founders get through the first funding rounds. That is why a metro with deep corporate roots can still post a weak startup ranking. (mnchamber.com) (technical.ly)
