#1 simply illustrates one of the reasons why rich people without particular interest in technology would prefer investing in finance rather than startups. It's a generalization, but has some truth to it.<p>In theory anyone can invest in anything from any city, in practice they don't. Investors tend to pick companies that are located relatively close to their offices. That's why the concept of hubs - from Silicon Valley to Hollywood to NYC - exists at all.<p>Actually, if geography didn't matter, New York would be much worse off, since the costs of living and other inconveniences of being where so many others want to be would make it a relatively poor choice to locate a company.