There's another element about SV that other places don't have. People. Talent that is able to walk across the street and go to something that's better suited for them. Talent so that you can end up with the right team.

Also, leverage.

A $20 mil fund in Boston acts differently than a $20 in the Valley. But take the Valley mentality, double the fund size to $40 mil, and while the approach will still very, the dollar size of investment all of the sudden becomes very similar. Funds in the Valley are bigger, they have more cash to invest, and have a much higher risk tolerance than their counterparts on the East Coast

http://www.j-lp.com/blog/2007/10/move-to-silicon-valley.html