3 of 6
Rank: 2
Startup Rate: 470 per 100,000 adults*

It's no surprise that California is among the top 5 states for entrepreneurial activity, said Jerry Nickelsburg, senior economist with the UCLA's Anderson School of Management. The Golden State boasts a culture of innovation, many college and business school graduates, and the second highest unemployment rate in the country.

Apple, Google and Facebook -- some of the most successful technology companies in the world -- got their start in the Los Angeles and San Francisco areas.

California also has a significant number of immigrants, who were more than two times as likely as Americans to start businesses last year, according to the Kauffman Foundation report. Immigrants -- especially those who came to the U.S. for economic reasons -- tend to be more risk-taking, a key component to entrepreneurism, explained Nickelsburg. And because of language and credential barriers, it's often easier for them to start a business than find a job, he said.

NEXT: Louisiana
Source: Kauffman Index of Entrepreneurial Activity
* No. of adults aged 20 to 64 who start a business each month with 15 or more hours worked.
LAST UPDATE: Apr 04 2011 | 6:11 PM ET
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