A startup has to be in the same place as its investors if they want to talk face to face, and empirically we've found this to be a necessity when talking about the subtle and complicated problems startups face. Email and Skype are such poor substitutes that they're a qualitatively different thing. Which means if a startup wants advice from its investors as well as money, they either have to raise money from local investors or one of them has to go to where the other is, at least temporarily.
Agree with you, it's certainly better to be at the same place, but there are hundreds of counterexamples of huge successes with VCs not living near the companies. In Europe, Israel, Russia, we have plenty of them.
We are also investing with a lot of local investors and they are sometimes managing the local relationship (or mostly making things worse :-()
Last but not least, many of our companies are targeting a local market (China, India, Pakistan, Switzerland, France, Argentina, UK, Germany...).
They have nothing to do in the Silicon Valley.
The YC model is awesome.
No doubt on that.
but there is room for many other models.
(and thanks God, we invested in Rapportive before they went to YC ;-)).
Check also what my partner is building : 1000Startups, the biggest incubator in the world in the center of Paris
http://1000startups.fr/en/
As far as I can tell, YC isn't much of an option if you aren't located in US. Besides most of the start-ups go down the drain not because they lacked advice but because they ran out of money. So congratulations for creating an option that can be considered by those who have no intention/ability of moving to US.
Ideally investors can give advice too besides money - it's nice to get two things instead of one. But there is some value to investors who can only provide money, as well as some value to investors who can provide money + advice-distorted-through-skype.
Agreed, most of the investors I've worked with provided zero benefit through advice. Often investors are out of touch with trends, they have their heads in the financial clouds and can rarely get past their infatuation with hockey sticks. Obviously some investors have a clue about the technology, but not in my experience - won't name names for obvious reasons.
