I realize that this is a Canada vs SV post, but I wanted to plug Boulder, CO as a great place to start a startup. We don't have even close to the amount of venture capital funding as there is in SV, but the talent pool is large and highly concentrated, and there are a decent amount of VC firms. Many tech companies both large and small are realizing this (for example, Google is currently in the process of building a 1500 person campus there, expanding on their current presence). Also, quality of life is very high.