[BerislavLopac]

Hm, doesn't that mean that the investors would be better off to go seek for interesting startups in the parts of the world where the investors are so rare that the founders don't have that kind of market power? And would accept nearly any valuation just to get funding?

Or it's still just easier to sit and wait for startups to fall in their mouths, accepting whatever terms they might ask?

[ra]

Assuming all other things being equal, yes. However all things aren't equal and many people live in a particular place because they like the lifestyle, or their family lives there or their kids have great opportunities etc...

You're right though. It's the corollary of startups moving to SF because that's where the investors are.