If you become a remote company, this problem is solved. There's a HUGE pool of talent working remotely. Don't isolate your options to one narrow locale.

Good point. But I enjoy working with people in person, having stand-ups, etc. While I could see maybe 50-75% of the team working remotely, I would still want to have some local team members. I guess there is one way to find out: post some jobs and see if anyone bites.

I would actually love to move to South America or Mexico for a job at a startup.

However, it's probably a generational thing. I'm young and don't have roots in any particular area. Working on a different continent sounds like a wonderful adventure.

What part of that is important to the business and others?

A startup is an organization in search of a business. As such, frequently collaboration needs to be done in person. Actual businesses have an easier time with remote workers.

This. Collaboration is key for a startup and that's best done in person.

I've been considering a move down to Mexico for a while now (from NYC), or at least splitting my time between Brooklyn and DF.

I think you could make it work, particularly if you allowed people to work remote for part of the year. You could also rent a house for remote employees to come spend time at with the hope that they decide to move local. A startup I worked for earlier in my career rented a townhouse on South Park back in 2008 or so, which was convenient for any of us that worked remote to come be in SF for a week or two if we wanted.

Plus I'm sure there are plenty of very talented engineers local to any major city that you choose to start in. Pair that with accommodating international hires with remote work, housing, and intensive Spanish lessons and you'll probably be fine.

Many large multinational corporations have offices in Buenos Aires with IT workers. RedHat has a local office that offers support for the entire region, IBM has offices for subcontracted IT, etc. In fact it's just gotten expensive enough there (the country still has some inflation although it is slowing) that some jobs are being moved out (Exxon comes to mind) from BA to India.

Like anything the talent pool and their ability to speak English is on a spectrum but my personal experience hiring in-region was and is a positive one.

I think it would be tough to get people to move to South America or Mexico for a job like that because of the uncertainty around the position. If I move to NY for a job and the company folds or I get fired, I can crash on someone's couch for a couple weeks while I get a new job. I can't do that in Argentina, and I have no idea if I could get another job there in the first place.