VC's like their investments nearby and very few people would choose to live in those cities, in particular childless engineers.

It's the same reason Twitter, even though they threatened to move their office from SF to Brisbane several years ago, absolutely would never have followed through with it. Too many of their employees would have quit immediately, and we're talking about a town that's 20 minutes away, let alone 2 hours.

Too add to that, repeat founders often live in the area where they start their companies. Also, if you want to poach away a top talent in a niche area, chances are they are unlikely to move far from where they are currently leaving. Example, easier for Tesla to poach from Apple vs. GM to poach from Apple