London, UK. It's expensive, but it has a startup culture that's probably only second to the Valley now. You can pretty much go to a startup event every day of the week now. The scene's still developing but the growth's been huge over the last couple of years.
Another alternative maybe Cambridge, UK which is cheaper, has it's own startup community, has a good talent pool because of the uni, and is only 45 minutes away from London using the commuter train.
Elsewhere in Europe, Berlin and Stockholm both have startup communities. I'd look at Talinn in Estonia if cost is a major issue, the government offers grants for companies hiring developers which can be of significant help in reducing labour costs.
An additional point: If you're starting in the EU, it's probably a good idea to incorporate your limited company in the UK even if you're in another country. Most EU countries have less company-friendly laws and more regulatory hassle.
Possible... I go to DrinkTank on occasion, and some other events every once in a while. Usually you can recognise me by the name tag that says "Daniel Tenner" (or just check my photo on my blog...)
Another alternative maybe Cambridge, UK which is cheaper, has it's own startup community, has a good talent pool because of the uni, and is only 45 minutes away from London using the commuter train.
Elsewhere in Europe, Berlin and Stockholm both have startup communities. I'd look at Talinn in Estonia if cost is a major issue, the government offers grants for companies hiring developers which can be of significant help in reducing labour costs.