I'm 37. I have set up businesses in London, Houston, Chicago, NYC, Edinburgh and (soon) Sydney. You can hook into a city in just a couple of months, being from elsewhere sometimes helps in creating interest, and the people who will be of most use to you in a start-up are likely to be very open to new people if they've got the skills, drive and charisma needed to succeed. Just my 2c.

I dunno.. even in biotech startups tend to cluster around specific areas (and universities).. A lot of state govts want to attract business, but have yet to achieve critical mass.

Without a doubt, you have to be near a university.