[mbesto]

This.

I have entrepreneurial friends in Sweden. Sweden is very progressive in terms of adopting technologies and you have a very strong set of techies and designers to boot. See Spotify, Klarna, etc.

What's the major drawback? Taxes. So, start your company in Sweden, progress it slowly, and then move it somewhere else (SF for example) if you really want to expand quickly.

[forza]

With all other things being equal I wouldn't recommend Stockholm as a startup city. While taxes are high, the big issues are cost of living and quality of life. Berlin seems like a better choice and there are a number of swedish (founded) startups there like soundcloud, readmill and researchgate.