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46. Madison
Population: 222,428
Pros: Vibrant college town, educated workforce
Cons: Frigid winters, expensive housing and property taxes

Madison is strategically placed near Chicago, Milwaukee and the Twin Cities - but many workers stay within the bounds of the city. Major companies include financial services and healthcare providers such as American Family Insurance and Dean Health Systems. The University of Wisconsin's flagship campus provides a talented, educated labor pool for startups: Madison boasts an unusually high density of PhDs.

Entrepreneurs also benefit from tax incentives such as the Angel Investment and Venture Capital Tax Credit, which is available to investors in small tech companies. Although winters are chilly, Madison offers a humid, temperate climate with four distinct seasons. Amateur sportsmen enjoy 260 parks and 150 miles of bike trails, while the University of Wisconsin's athletic teams draw rabid fans from miles away. -Mina Kimes

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NEXT: 47. Gainesville

Last updated July 02 2008: 11:16 AM ET
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