Silicon Valley is No Longer the Hottest Area for Startups

The index, which is managed by the Ewing Marion Kauffman Foundation, measures national, state and metropolitan levels of entrepreneurship, growth rates of new entrepreneurs and the number of startups per capita.

In 2014, San Jose took the top spot for startups in the country — this year, the city has fallen to third place. The city of San Francisco also fell from fifth place to sixth.

This year’s hottest startup hub is in Austin, Texas, home to the annual SxSW festival that takes place every March. Miami, Florida took second place this year while Los Angeles and Denver took fourth and fifth, respectively.

Startups in the index are defined as businesses less than a year old with at least one other person besides the owner.

Here are the top 25 cities for this year’s metropolitan startup activity in the U.S.:

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Based on the map, where blue indicates high startup activity, the West Coast is still the best coast for startups.

On the state level, Montana is still the No. 1 state to grow a startup, possibly due to the growing oil industry, low cost of living and the absence of sales tax. California comes in at 14 on that list, falling from fifth place last year.

According to the national index, startup activity in general is on the rise from an all-time low last year.