The startup culture is part of the Golden State's DNA.
California is one of the most dynamic places to open a small business. After all, Silicon Valley is the heart of the nation's tech startup scene. Meanwhile, the state's dynamic immigrant community is opening small businesses at a fast clip.
Innovative founders here enjoy major advantages, including a strong talent base, an established network of venture capital, a big consumer market, and top-notch private and state research schools, said Allan Zaremberg, CEO of California's Chamber of Commerce. Another plus: its proximity to key international markets such as China and Japan, he said.
Still, there are a few obstacles to launching a startup here: Cumbersome regulations, high labor and health care costs still are part and parcel of doing business in California, Zaremberg said.
Source: 2013 Kauffman Index of Entrepreneurial Activity, published by the Kauffman Foundation. The 2012 startup rate for each state is based on a yearly national survey of about half a million people -- adults aged 20 to 64 who start a business each month with 15 or more hours worked. In Montana, for example, Kauffman found that 530 of every 100,000 adults started businesses in 2012.
By Parija Kavilanz @CNNMoney - Last updated June 20 2013 11:48 AM ET