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.