My guess is there's a huge sample bias here. PG was probably assuming a similar applicant pool to what YC gets (ie if YC ran a summer in Atlanta, almost all of them would move away after) but the reality is that Shotput's starting pool is much different and shall we say less "serious", by which I mean talented and motivated.

Not too be elitist, but YC is clearly the top of the food chain in the micro-angel funding niche, where the most motivated founders go first. It was the only one we applied to, and if I were doing it over again it still would be. Then there's a couple others a rung below it, like TechStars, and a rung below that with a couple players like LaunchBox and maybe Shotput. (I've actually never heard of them, which is hard to accomplish in this industry, but I'll assume they're pretty decent and it's just because I've been working too hard lately).

So the startup founders move their way down the chain from the top, with the best x% being selected at every tier. At the YC level, you've got the highest quality and most motivated talent pool. At the bottom levels you've probably got the people who either whiffed their way down the chain, or just are looking for one near where they live. If I lived in Atlanta (which I could, it's a great city) and wanted to do a startup but wasn't particularly keen on relocating I might give it a go, assuming the Shotput guys brought enough to the table to make up for the small equity stake.

I'd guess PG wasn't taking that into account with his initial comment. I'd love to know what % of their funded startups have founders who lived within driving distance beforehand.