You've just mentioned my reservation about London: because cost of living - a startup's main costs in the beginning - is so much higher than the rest of Europe, your increased burn rate would have to be justified by increased opportunities. Or are all startup hubs expensive to live in?

No. London shares with NYC the problem of being a big city and thus expensive to live in. Some of the other places are quite cheap. SV is. SF is expensive, but SV is a huge expanse of cheap, month-to-month apts.

Cheap startup hubs probably don't exist. They are hubs because everybody moves there, which inevitably makes housing expensive. The trouble with London is that if your funding is in USD or EUR the exchange rate exacerbates the problem.

There are upsides too, however. Many european countries require entrepreneurs to make very high social security contributions regardless of earnings. In some cases as high as EUR 350 for earnings of 0, so that counts towards the burn rate as well. In the UK the basic rate of NI contributions for the self-employed is GBP 2 (USD 4) a week, which covers health insurance excluding dental.

(currency symbols don't appear to work here...)

You can always live/work outside London and hop in for the events+networking. Brighton is particularly popular, though I am partial to Bristol myself.

How about Tallinn? Hardly a tech hub, but from what I have heard (never been there), a bit of a startup scene.

I would also assume that Tallinn might be a good place for startups (definitely a fun place in any case). Didn't Estonia provide free high-speed wireless to the entire population? Plus, it's a beautiful area -- I loved my visit there.

Hey, good idea, are they not super-techy there, like they even pay for parking slots through their mobile phones?