Where You Can Find the Greatest Number of Minority Startups and Why
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Where You Can Find the Greatest Number of Minority Startups and Why

A recent report by Volusion reveals the 15 U.S. cities that house the largest number of minority-owned startups. California appears most often on the list, representing five cities. San Jose, Riverside, and Los Angeles occupy the top spots on the list, followed by San Francisco in fifth place and the state capital, Sacramento, in last place. Other cities in the top 10 include Miami, Florida and San Antonio, Texas.

The absence of some major cities on the list points to a larger issue. Minority representation in the startup arena pales in comparison to the overall U.S. minority population. While minorities are on pace to constitute more than one half of the U.S. population in the next 25 years, minority-owned startups make up just over 25 percent of new businesses.

In addition, the presence of minority-owned startups in many of the listed cities is disproportionate to the city’s overall minority population. Volusion reports that “Out of the 50 largest metropolitan areas in the U.S., only St. Louis has more minority-owned startups (40.5 percent of total) than expected based on population composition alone (26 percent minority).”The lack of financial backing for minority-owned businesses is a factor in their underrepresentation. Since critical revenue affects their ability to thrive and succeed, many minority entrepreneurs may take root in higher revenue-generating areas.