But I've worked at a couple VC funded SV startups and it wasn't exactly unusual for our investors to show up in the office and see how things are going, get a tour, have meetings. I doubt it's a contractual obligation of any sort, but there's clearly pressure to have a staffed office both local and impressive to the investors.

This left me assuming the VCs on Sand Hill Road would hold substantial real estate in the area, both commercial and residential. You're far more willing to throw hundreds of millions of dollars at high-risk investments if you can be confident they'll be throwing most of that money at office leases in the area, and salaries spent on rents and/or inflated bubble mortgages in the area. Especially if you can be confident all your investing peers on Sand Hill are doing the same, further inflating the bubble. The businesses will probably flop, but most that money just comes back through the real estate side provided you keep it all concentrated locally.