Establishing startup in Tallinn is easy from the administration perspective. We have e-residency program that grants foreigners access to the government services, also it is respected by financial institutions. Also English is widely spoken in Estonia, so you would easily find legal advice, accounting service provider, etc that speaks English and can help you during your entrepreneurial journey.
There is not too much co-working spaces in Tallinn, but this is not a problem at all. You may work from nearly any coffee, public space like library or university - they all offer broadband wireless internet for free. You can rent space in some startup incubators. And once your startup needs more privacy, it is not too expensive to rent an office outside of city center (5-10 EUR per sq.m. per month).
Cost of living as usual depends on desired level. You can rent 1-2 bedroom apartment for 300-600 EUR per month. In general, all other expenses (food, basic services, etc.) would not cost you more then 1000 EUR per month, unless you prefer fancy lifestyle. Of course, if you have family with you you should adjust this number for number of people you bring with you.
Seed funding opportunities in Tallinn are limited compared to Silicon Valley (obviously), or to Berlin and London and even Helsinki. Nevertheless, there are well-established startup ecosystem and if you make connection within it you would get advice how to get funding. Also there are relatively cheap connection to Helsinki, Berlin and London that have much bigger market where to seek for funding and present your project. Finally, it is not about the space, but about your activity.
Being a startuper in Tallinn you need be proactive first of all, as competition is rather high. This means talent acquisition would not be an easy job for you to do. Estonia is not a cheap country anymore, and unemployment rate in IT sector is close to zero. Labor cost for one senior specialist starts from 5000EUR per month (I mean the cost company pays, incl. governmental taxes, distributed hiring cost, etc). If you already have a team it would not be a critical issue, but if you are looking for hiring in Tallinn, be prepared: people are picky here, and you really need do your best explaining them why they should work for your startup, and not for Transwerwise, Toggl, Pipedrive and 50 other very attractive young startups.
You may easier find scholars and students who are willing to participate in startup activity, but then you should discount for their experience. Positive side: people in Estonia are highly motivated and well educated, eager to know new technologies, so you may hunt for them in the beginning.
Good luck anyway!