Starting a Business? Move to One of These 6 Cities

2. Des Moines

"To be honest I came through Des Moines and was trying to fill some time before I left and headed to the Bay ... and I ended up finding that there was a unique knowledge base here and a unique support system," says Ben Milne, founder and CEO of Dwolla. "And then I found Iowa-based investors that offered support that I couldn't get outside of Iowa like the Technology Association of Iowa. They helped me along every step of the way and I just never needed to leave to find the things that the company needed next."

The mobile payment network, which competes with the likes of eBay's (EBAY) PayPal and Square, launched in December 2010. With 30 employees and growing, Dwolla's initial success is emblematic of the growing startup activity centered in Des Moines.

As one of the largest insurance hubs in the nation, as well as having a large banking outfit, many smaller companies are finding success selling product solutions back into those industries.

"Startups are thriving," says Jay Byers, CEO of The Greater Des Moines Partnership, a regional economic development and community organization serving central Iowa. "There's just a lot of great momentum that's happening here. We're looking at doing some other efforts within bioscience and advance manufacturing that are to work in conjunction with what we've done."

Residents also appreciate the quality of life in a place like Des Moines, where surely costs for food, fuel, car insurance are lower than in major metro hubs -- not to mention Iowa is one state not running a deficit, something to be appreciated in the troubled economic times.

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Perhaps that's why population in the Greater Des Moines Region, which includes eight counties is projected to grow 6.8% by 2017, according to the organization's Web site.

Additionally, according to Moody's, the cost to operate a business in Des Moines is 17% below the national average, cites Byers.

"The ability to live close to work, to be able to buy a big house and have a great quality of life" is appealing to professionals, Byers says.

"The view toward Midwest has changed a lot in the last 10 years," says Mike Colwell, head of business development for the Greater Des Moines Partnership.

From business incubator StartupCity Des Moines to the accredited angel investors, Plains Angels, there are plenty of organizations ready to help out young, promising companies.

"What's interesting that's changed now were seeing VC startup funds that are focused only in the Midwest," Colwell adds. "I find it very encouraging. A lot of people are seeing the deal costs and the valuations on the coastlines that are so high. [In the Midwest,] we're looking at people trying to raise a $1 million that are already at revenue."

Although Milne acknowledges that as the company grows it is already expanding outside of Iowa, he says Dwolla's hub will remain in Des Moines.

"The reality is we have access to a ton of really talented engineers and people to help us on the support side . . . and there's a lot of tools [in the city] that didn't exist 10 years ago, that give us the ability to benefit from the architecture and the infrastructure and the knowledge base that's already built here," he says.

"Des Moines is a very supportive community and not in the way that they're looking for the next magazine cover, but it's full of good people that just want to see other people succeed," Milne says. "Time and time again I've been astonished by the level of support I've received in Des Moines."

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