2. Texas
Texas
2011 startup rate: 440 per 100,000 adults

Texas doesn't mess with entrepreneurs. It's tax-friendly, with no personal or corporate income tax. Regulations don't change frequently. Labor and housing costs are reasonable.

And the economy is relatively strong, attracting more than 1,400 people a day to move there. Cities such as Dallas and Austin boast some of the lowest home foreclosure rates in the country, according to the Texas Association of Business.

Startups abound in the vibrant health care industry, thanks to the state's rapidly growing population. Texas boasts top medical schools, such as Texas A&M's, one of the fastest-growing in the country. The Texas Bio Corridor, which stretches 275 miles along Interstate 35 from San Antonio to Dallas-Fort Worth, is home to a growing number of health care, biotech and medical device startups.

Elsewhere, professional and technical services such as consulting, accounting, engineering and construction contractors are booming.

Fledgling businesses have access to capital through a mix of public and private programs. For example, the state's $250 million Enterprise Fund woos businesses being tempted to open in or move to another state. In return, firms must guarantee they'll create a significant number of local jobs. Meanwhile, tech startups can get cash from an Emerging Tech Fund if they agree to partner with a university in the state for their R&D work.


By Parija Kavilanz @CNNMoney - Last updated June 13 2012: 1:25 PM ET
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10 most entrepreneurial states

Opening up a small business in a tough economy is a risky gamble. But these ten states saw more startup activity than anywhere else nationwide. Here's why.

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