I think Austin is an excellent location for a startup. You have good high tech infrastructure, a good college that (at least in the 1990s) put out CS students

I think Austin is an excellent location for a startup. You have good high tech infrastructure, a good college that (at least in the 1990s) put out CS students who actually had a clue, a very supportive community, low cost of living (again at least it was), etc. And a large number of very intelligent engineers. Also, I wonder if something like the effect that we see in the Windows shareware market vs. the Mac shareware market isn't also happening with investors. Mac shareware authors make more money because the mac market is smaller. While the windows market is larger, the proportion of shareware authors is even larger, crowding out your product. So, its more profitable to target the smaller market. VCs in Texas are more likely to fund a company in Texas... there may be more VCs in California than there are in Texas but there are a lot more startups in california competing for the funding.