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Portland, Oregon

Some people call it Silicon Forest, and it's easy to see why: Portland has given rise to MyOpenId, Voyager Capital-backed AboutUs, interactive TV company Ensequence, which raised $20 million in 2009, and ShopIgniter, which closed a $3 million round from Seattle's Madrona in 2010. The city still lacks many second-generation entrepreneurs to provide mentorship and angel investing. But thanks to the affording cost of living, myriad small-scale startups have settled here. Portland is also drawing startups from beyond its borders. In 2004, Jive Software, maker of social marketing tools, decided to move to Portland from pricey New York. Five years later, it posted annual revenue of $30 million.
Image: Flickr user Stuart Seeger