[Johnny555]

Which is why so many startups are located in the SF Bay area. Rent is absurdly expensive and hard to find (both office space and residential space) thus salaries and operating expenses are high -- good tech people can pretty much name their price.

Yet, despite this, at the end of the day, it's still the best place for many tech startups - they have a nearby talent pool (even though it can be challenging to entice people to make the leap), plus there are plenty of investors nearby.

But if you're trying to bootstrap a startup with your own funds and a few friends, I can see why moving to a place with a very low cost of living would be beneficial.

[gizi]

The reasoning about investors is circular. In order to be nearby investors, these startups need lots of money, which means they need investors, so that they can be nearby them. These investors then end up owning most of the shares in these startups. That is good, because these startups are nearby anyway.