As a the co-founder of an NYC startup I would like to share my insight. NYC is a great place to do business if your startup is consumer facing with a marketing skew. If you are an engineering company you do not belong here. I also truly believe it is extremely hard to raise funding here, much more so than in the Valley. NY Seed is the biggest joke in the world. Most of the VC firms are run by ex-finance guys that are not willing to take chances on ideas. Obviously this is changing (think Betaworks and USV.)

I also think the Startup scene here is especially small, and full of the kind of people you should avoid. If you really want to meet the kind of people that will help you and are doing innovative things you need to head to Brooklyn or hunt them down. They are not at New York Tech MeetUp or any of the other startup events. Most people doing interesting things (I am only doing somewhat interesting things) are doing them off the radar. The people you hear about are kind of like the football players from High school - everyone knows about them, but they don't really amount to anything.

If your doing a startup in NYC, you should surround yourself with other interesting people outside the tech community. Meet people from Fashion, Music, Art, Advertising, PR, Marketing, ect. NY has so much to offer - the key is not to get stuck in the tech community. NY is all about expanding your horizons, and that is truly the benefit of starting a business here.