Women-Owned Businesses Are on the Rise in America, but Which State Offers the Best Environment for Female Entrepreneurs?

We’ve conducted an in-depth research study to determine the best states to be a female business owner.

Key Takeaways

  • California, Colorado, New York, Florida, and Vermont are the best states for women-owned businesses.
  • Nevada has seen the largest increase (83%) in women-owned businesses in the past 20 years. The largest decrease (-16%) occurred in West Virginia.
  • The most lucrative deals for female-founded startups are in Massachusetts, California, and New Mexico.
  • California, New York, and Texas have the most female-founded blockchain companies in the U.S.

Women-owned businesses (WOB) continue to rise in number and impact across the country, despite the pandemic, the labor shortage, and a still heavily patriarchal backdrop. And while the feminine entrepreneurial spirit can thrive anywhere, certain states actively encourage and support WOB more than others.

Using census data of WOB, women-to-male pay ratios, revenue streams, and more, the team at Clarify Capital uncovered the friendliest states for women-owned businesses and females in business in the country. Of course, we also found the unfriendliest states for women entrepreneurs. Read on to discover the best places to launch a female-owned company.

Best and Worst States for Women-Owned Businesses

The terms “best” and “worst” can often be subjective. However, for this study, we’ve defined “best” as the states that ranked highest after accounting for the following five variables: percentage of female-owned small businesses, women-to-men pay ratios, female unemployment rates, WOB with $1 million or more in annual revenue, and female-owned companies per 10,000 residents in each state. Researchers then aggregated these data points to create the following state rankings.

California, Colorado, and New York stand as the three best states for women-owned businesses. Based on our five compelling aggregate data points, these states have the friendliest environments. Next, we look at the best and worst states for each metric.

Although it didn’t make the top 10 of our ranking overall, Wyoming ranked first in the percentage of female-owned businesses category and second in the female-owned businesses per 10,000 residents category. However, it ranked last in the women-to-men pay ratio category, with a ratio of just 0.65.

Meanwhile, fifth-place Vermont was number one in the women-to-men pay ratio category. According to U.S. Census 2020 Annual Community Survey data, the women-to-men pay ratio in Vermont is 0.89, followed by 0.88 in New York and 0.87 in Nevada.

In terms of annual revenue, female-owned companies in California are earning the most. For example, culinary lifestyle company Hedley & Bennett is a $6.5M empire. California is also home to many celebrity-owned companies that rake in significant dollars, like Jessica Alba’s The Honest Company.

Perhaps Colorado women weren’t making millions of dollars as often, but there are the most female-owned businesses per 10,000 residents in the Centennial State. Women have also been working their way up at male-owned companies in Colorado. Women now make up nearly a quarter of all Colorado company boards, up 7% from a decade ago. Colorado also ranked in the top 10 for women-to-men pay ratio, scoring tenth.

Women-Owned Businesses Rising Rapidly in These States

One key factor not included in the metadata above is the percentage increase in women-owned businesses. In the U.S., there are currently 114% more female entrepreneurs than there were 20 years ago. Perhaps certain states have not yet reached the numbers and revenue of California and New York, but their strides and improvements from years prior are undoubtedly noticeable. Below is a look at how things have changed since 2002.

Nevada has seen the highest percent increase in women-owned businesses since 2002 — a staggering 83% increase, to be exact. Nevada’s border neighbor, Utah, ranked second at 77%, followed by Florida (55%) and Colorado (52%). West Virginia has seen the most significant adverse change in women-owned businesses, with a 16% decrease since 2002. New Hampshire ranked second to last with a 5% decrease.

According to U.S. Census Bureau data reports, California has always been number one for the total number of women-owned businesses. Over the years, Florida, Texas, and New York have competed for second, third, and fourth place. California is the single-most populous state, so its high number of women-owned businesses may be more due to its population than any other factors. However, California does offer a hefty amount of capital to these entrepreneurs, as we’ll see shortly.

States With Capital Readily Available for Women

It often takes money to make money, especially as an entrepreneur. Some states are doling out more cash to female business owners than others. Though we don’t explore why in this study, the following charts show the most lucrative deals for female-founded startups based on total capital invested and deal counts. We’ve also noted states with the most female-founded blockchain companies.

Massachusetts is flooding its female founders with more capital than any other state. According to the most recent data from Pitchbook, Massachusetts ranked number one for the most lucrative deals, with an average of $13 million per deal.

Deals from this region were primarily with software and pharmaceutical companies in the Boston area. However, the vast majority of the funding is going to businesses co-owned by both male and female founders, suggesting a gender balance may be most compelling in this area for raising capital. California ranked second, with funding most often going to software companies. These startups also had a mix of genders at the helm.

One of the most lucrative entrepreneurial endeavors today, especially from a venture capital standpoint, is creating blockchain-based businesses. These businesses can earn money by developing software, smart contracts, or apps. They can also increase revenue through cryptocurrency speculation or transaction fees.

Women are flocking to these opportunities, particularly in California and New York. California currently has 82 female-founded blockchain companies, the most of any state. Ranked second, New York had less than half of this. Overall, nearly 4 in 10 female-founded blockchain companies are based in the U.S.

Where the Future Truly Is Female

Women in business still meet their fair share of obstacles, but certain states are working hard to give female founders increasing opportunities to thrive. California currently touts the highest numbers of female founders and the ones now making the most money. That said, states like Colorado have more female owners per 10,000 residents, while states like Massachusetts are investing the most heavily in this segment.

However, the friendliest state for business may have to do with a person’s particular needs and industry. With blockchain technologies set to take the world by storm, this industry is best suited (or at least most heavily situated) in California, especially for women in blockchain. The state that speaks most to your particular industry, gender, and aspirations will ultimately be a personal choice, but now it's also one you can base on solid data.


The metaranking for the best overall states for women-owned businesses synthesized the following five variables per state:

  • Percentage of women-owned small businesses
  • Women-to-men pay ratio
  • Female unemployment rate
  • Number of female-owned businesses with annual revenue of $1 million or more
  • Number of female-owned businesses per 10,000 residents

These variables determine which states have the friendliest environments for female entrepreneurs. All data was obtained from the most recent U.S. Census Bureau Annual Business Survey (2020) and Annual Community Survey (2020).

Metrics and Weights for the Metaranking

Data from Pitchbook was used to determine which states had the most lucrative deals for female-founded startups. The total capital invested was divided by the total deal count to calculate the amount invested per deal in each state. Crunchbase was used to determine where the top female-founded blockchain companies are located in the U.S.

About Clarify Capital

Clarify Capital helps business owners secure the necessary financial backing to fund their unique ambitions. With this foundation and support in place, business owners can be more than just owners — they can truly become entrepreneurs, visionaries, and innovators.

Fair Use Statement

Women-owned businesses are increasing, producing, and thriving. If your audience is interested in this type of material, you are welcome to share the research with them. Just be sure your purposes are noncommercial and that you link back to this page.

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