Other top cities on the list included Pittsburgh, Pennsylvania at number two; Raleigh, North Carolina; Houston, Texas; and Hartford, Connecticut, among larger cities. The small business magazine also ranked mid-sized and smaller cities.

"Historically, fast-growing small companies have led the U.S. economy out of recession. And according to our latest poll, nearly half of all small business owners would consider moving if doing so would help their companies," said Fortune Small Business editor Jessica Bruder. "Location matters more than ever before. The Great Recession redrew the map of America."

Fortune teamed up with researchers from the Kauffman Foundation, a nonprofit supporting entrepreneurs, to help select the top 50 cities in the country for startups.

Using data from various sources, the researchers selected cities with low foreclosure rates, low unemployment, low wages and little crime, along with high percentages of college graduates.