The other benefit of locating in Silicon Valley is convenient access to multiple first and second tier universities. Many startups are founded to commercialize research done in those schools. Only a few other areas have a similar concentration of top schools.
Harvard isn't just pretty close to Boston. It's right across the river. If you stand on the campus of Boston University you can look across the Charles river and see the campus of both Harvard and MIT. That's 3 top 50 schools within sight of each other. BC, Northeastern, and Tufts are just a few miles away from BU. That's 6 top tier universities all within a few miles of each other.
