Which state(s) would you relocate to if you were thinking of starting a startup?. Why do you think those states are 'Startup Friendly'?
Correct me if I'm wrong, but I believe the Bay Area of CA is the startup capital of the nation. It's probably the best place to be in the company of serial entrepreneurs, VCs, and tech startups.
Boston, MA is a great city for social media and there are lots of startups there as well.
Houston, TX has a low cost of living and a budding community of startups. The Houston Technology center is an incubator in the downtown area with affordable rent and all-inclusive services.
Austin is a good choice as well, as there are a lot of tech companies there. Texas has no personal income tax and I believe there are many other benefits relating to personal and business taxes.
I'm sure I'm forgetting other important cities. Seattle or NYC maybe?
So, there are a few things to consider:
Besides the article in Money, I could swear there was one recently in either Inc. or Entrepreneur, so you may want to check there as well.