Twin Cities Lagging For New Startups
- A new national report ranks Minneapolis–St. Paul poorly as a place to launch new businesses. - The analysis cites low startup rates, limited access to early-stage funding, and weak business formation metrics. - Local leaders say the results highlight needs for better resources and investment to boost entrepreneurship (patch.com).
Minneapolis and St. Paul landed near the bottom of a new national ranking of big U.S. cities for starting a business. (wallethub.com) WalletHub published its 2026 list on April 20, comparing 100 large cities across 19 measures, including five-year business survival, labor costs and office-space affordability. The study put Minneapolis outside the top tier, while Minnesota ranked 37th among states in a separate 2026 WalletHub startup report. (wallethub.com, wallethub.com) The Twin Cities result sits against a local dashboard that already shows Minneapolis–St. Paul slipping against peer metros on growth and innovation. Greater MSP said in August 2025 that the region ranked in the bottom quartile on those measures even as it stayed in the top quartile for infrastructure and quality of life. (greatermsp.org) That gap helps explain the contradiction in the region’s startup story. Minneapolis–St. Paul has a deep bench of corporate employers and customers — including the highest number of Fortune 500 headquarters per capita among large metros — but local analysts say the earliest funding rounds remain a weak spot. (technical.ly) The Nasdaq Entrepreneurial Center’s 2025 Advancing Regional Innovation Economies report still included Minneapolis–St. Paul among 20 metro areas it profiled as entrepreneurial growth engines. The report and local follow-up both pointed to “procurement as capital,” meaning startups can grow by winning contracts from large hometown companies before they land big venture rounds. (nasdaqcenter.org, technical.ly) Even so, Greater MSP’s funding tracker says venture-capital deal flow is a core measure because young companies need outside money to hire and scale. Its dashboard also flags a racial funding gap, citing Forge North data that BIPOC-led startups historically receive only 2% of venture funding in the United States. (greatermsp.org) Local groups have been building more on-ramps for founders. The MSP Startup Guide, backed by Forge North with state grant funding through Launch Minnesota, lists investors, accelerators, mentorship programs and founder communities in one place for Minneapolis and St. Paul entrepreneurs. (mspstartupguide.com) The new ranking does not say startups cannot work in the Twin Cities. It says the region’s low business-formation and early-capital numbers are now showing up in national scorecards, alongside a local warning that growth is lagging. (wallethub.com, greatermsp.org)
