There's a network effect. People want to live in a place where they have plenty of options if their current job doesn't work out. Employers want to have a large pool of local talent to draw from. This is all self-reinforcing and probably the reason why companies start and stay in the SF bay area even though the cost of living is insane.

As long as the VCs don't want to invest in a company they can't drive to in an hour or less, that's going to be a problem.