Massachusetts Ranked No. 2 for Starting and Growing Businesses

State's deep talent pool, patent output, and venture funding cited as key factors

Published on Feb. 22, 2026

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A new study has ranked Massachusetts as the second-best state in the nation for starting, growing, and operating a business. The Commonwealth was praised for its highly educated workforce, strong patent output, and robust venture capital funding, trailing only Washington state in the rankings.

Why it matters

This ranking provides further evidence of Massachusetts' status as a premier destination for entrepreneurs and startups, highlighting the state's competitive advantages in talent, innovation, and access to capital. It serves as a valuable talking point for local businesses looking to attract top talent and investment.

The details

The study, conducted by a leading business research firm, evaluated states based on factors such as the share of college-educated adults, patents per capita, and venture capital investment. Massachusetts' 46.6% rate of adults holding a bachelor's degree or higher, along with its high patent output of 126 patents per 100,000 residents, were cited as key strengths. The state's biopharma companies also pulled in $6.85 billion in venture funding in 2025, demonstrating the continued investor appetite for complex, capital-intensive startups.

  • The study was published on February 18, 2026.
  • Massachusetts' biopharma companies received $6.85 billion in venture funding in 2025.

The players

Massachusetts

The Commonwealth of Massachusetts, known for its highly educated workforce, strong patent output, and robust venture capital funding.

Washington

The state of Washington, which ranked first in the study on starting and growing businesses.

Boston Business Journal

The local business publication that reported on the study's findings.

MassBio

The industry group that reported on the $6.85 billion in venture funding for Massachusetts biopharma companies in 2025.

Business Front Door

A program in Massachusetts that aims to centralize information on permits and incentives for businesses, helping to streamline the growth path for entrepreneurs.

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What’s next

State outreach efforts, such as the Business Front Door program, are working to make the growth path for businesses in Massachusetts less maze-like by centralizing information on permits and incentives.

The takeaway

Massachusetts' strong performance in this study underscores the state's continued appeal for entrepreneurs and startups, driven by its deep talent pool, robust innovation ecosystem, and access to venture capital. However, challenges remain, including high real estate and labor costs, as well as fierce competition for top talent, requiring sharp execution and tight cost control from local businesses.