#1 Talent. Plain and simple, having access to a deep and wide pool of various types of engineering talent is the primary reason for locating in or near the silicon valley. There are not only lots of very high quality universities in the bay area, but we also regularly steal the best and brightest engineers from all over the world whenever possible. If you plan to scale, you will need to hire, and the more skilled and talented your employees are, the better off your company will be.

#2 Personal Connections. Anyone with a clue could scrape together the $20K USD investment offered by YC, but no one can match the connections (and insight) you'd gain from being a YC funded company. YC just happens to be an excellent example, but it's certainly not the only avenue for acquiring connections.