[mahyarm]

More startups are in SV because of the larger amount of investment capital that is interested in software and the large amount of people to hire with very specific skill sets that you may be looking for. It's like thinking you need food first before you need oxygen, when it's the other way around.

[tankenmate]

Indeed this is why places like London which, in total capital terms, is much bigger than SV doesn't have as many internet focused start ups that reach massive valuations; there isn't as much internet focused capital floating around, and that in turn is because UK (and similarly European) companies don't make as many hi-tech acquisitions as US companies do. Investment is largely a supply driven business.