Zynga has acquired 20+ companies on crunchbase. Is Zynga biased towards acquiring companies in the bay area, or are companies that Zynga would be inclined to acquire mostly located in the bay area anyway? Or is it that bay area startups tend to perform better / receive more funding than their non-bay counterparts?
The Bay Area has capital, talent, customers, users and (most of all) clueless corporate executives who will acquire anything, rescuing the careers of even the most brazenly failed founders. You're not taking much of a risk because everything is there.
Other regions have some or most of those resources, but the VC is skewed heavily in favor of the Bay Area and that shows no signs of abating. NYC venture capital exists, but there's even more pedigree-whoring in that scene (mostly favoring MBAs and banking flame-outs) than in SV.
I don't like that it's that way, but it is. If you want to do a startup, you're best off to be there.