Midwest Entrepreneurs Distrust State Support Despite Federal Funding Boom
A new survey has highlighted a striking gap between what entrepreneurs expect from state governments and what they actually receive. Conducted in summer 2024 by the University of Minnesota and the University of Wisconsin-Madison, the study gathered responses from nearly 10,000 households across the Midwest. The findings reveal widespread scepticism about government backing for new businesses, despite growing federal support in recent years.
The Midwest Entrepreneurial Climate Survey found that only 11% of participants believed their state government would offer strong support for launching a business. In contrast, 40% felt such support should be available. This mismatch suggests a clear divide between expectations and reality for aspiring entrepreneurs.
Families emerged as the most trusted source of help when starting a business, regardless of whether respondents lived in rural or urban areas. Interestingly, rural communities showed higher rates of entrepreneurship, with 15% more respondents owning a business compared to their urban counterparts. Since 2020, federal support for startups has expanded significantly. Laws like the CARES Act, American Rescue Plan, CHIPS and Science Act, and Inflation Reduction Act have injected billions into grants, loans, tax credits, and research funding. Programs run by the Small Business Administration (SBA) and National Science Foundation (NSF) have further boosted opportunities. Meanwhile, states such as California, Texas, New York, Florida, and Colorado remain the most startup-friendly, thanks to tax incentives, incubators, and strong venture capital networks.
The survey underscores a reliance on personal networks over government assistance for new businesses in the Midwest. With federal funding growing but state-level support still seen as lacking, entrepreneurs continue to turn to family and local resources. The higher rate of business ownership in rural areas also points to a distinct entrepreneurial landscape outside major cities.
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