Another reason and a big reason seems to be past success, you need people with capital to invest. Once an area gets a couple large companies to cash out not only do those people tend to invest or start companies in similar industries but people around them see their success and want in on the action. If Groupon has a successful IPO and enough employees cash out Chicago could very well become the next large hub. This is the reason why you need a physical hub, but I think AngelList might be removing that hurdle.
On the same note, the investors, lawyers, and employees in startup hubs have 'standard terms' where as in other parts of the country the terms get extremely complicated with things such as tranches. They understand what it takes to succeed since they've usually done it before and are there to guide the company.
On the same note, the investors, lawyers, and employees in startup hubs have 'standard terms' where as in other parts of the country the terms get extremely complicated with things such as tranches. They understand what it takes to succeed since they've usually done it before and are there to guide the company.