As many folks move to the Silicon Valley and choose where to dock their office and home I think this topic is worth some understanding. It is key to be physically close to where the action is and be ready to take a breakfast or dinner meeting in San Francisco or Palo Alto and not get caught in horrible Bay Area traffic which rivals L.A., Moscow and Shanghai. We’ve got the most evolved and complex ecosystem for startups, venture capital, tech titan corporates, etc. There is no point to being here if you are not meeting the right people and going to the right events. Choosing to live or commute to the wrong place will have negative consequences.

Things are always changing in Silicon Valley and I have had friends from around the world ask me about this; so I thought to share my views with everyone.

I used to strictly think of Silicon Valley as the area of land south of San Francisco and all of the Peninsula and inclusive of the South Bay cities and towns of San Jose, Cupertino and even a bit stretching towards Santa Cruz such as Los Gatos.

I used to not think of San Francisco as technically part of the Silicon Valley, because it was not really the physical Valley that is between the Santa Cruz mountain range and the SF Bay of water. I always thought that San Jose was kind of cheating to be in Silicon Valley and the East Bay is really more part of the greater San Francisco Bay Area.

The truth is anyone in the San Francisco Bay Area is part of the Silicon Valley if they want to say they are. That means Berkeley, Oakland, all up and down the East Bay, rounding around the South Bay, up the Peninsula, through the city and over the Golden Gate bridge inclusive of Sausalito and the lovely Marin County hamlets.

So what’s changed and where is it hot?

As startups have become cheaper to launch and bring a high death rate of failure and personal and financial risk it is often a young man’s game. That means you often see founders in their early 20’s and 30’s leading hot startups. There is hardly anywhere to get a drink after 9 pm in Palo Alto or most places south of San Francisco; so over the past 10 years we’ve seen a lot of the internet media tech apps type companies move smack into the middle of the City. So it became clear that San Francisco is officially part of the Silicon Valley and the cluster of VCs on Sand Hill Road in Menlo Park next door to Palo Alto’s famous Page Mill Road and gentrified University Avenue is a bit away from the center of the action these days.

Although this is a trend of lots of media tech companies moving into San Francisco I noticed about 7 years ago that a lot of the heavy hardware and major enterprise technology startups were located peppered across the Silicon Valley mainly in and around Palo Alto from San Mateo on the northern side all the way down into Cupertino, Mountain View, etc. I think this is because these startups require more years of business experience than the latest messaging app targeting college students. So the founding teams of these enterprise apps are older and already have families and kids. So rather than want a pub and a bar to go for drinks after work they want a back yard where they can play sports with their kids. So these founders locate their companies all around the Peninsula (Silicon Valley suburb area).

It is not totally black and white with real enterprise tech being in the Valley and consumer internet in the City, but you do see a bit of separation. It has more to do with the age of the founders and there are tons of exceptions.

For me running a VC fund, the ideal situation I think would be for us to have our flagship office in San Francisco and have a second office in Palo Alto right in downtown near the restaurants and shops to enjoy. This way you can even take meetings with founders that can take Caltrain and not deal with an expensive taxi or need to borrow a car to meet a VC on Sand Hill Road. I can also meet folks for breakfast anywhere from SF to Palo Alto or speak at or attend evening events anywhere. If you live in the South Bay you will find yourself not bothering to go to many events in SF and vice versa.

When I see a Japanese company locate their CVC in a place like Santa Clara or San Jose I view that as a big mistake that they are too far south and away from the action which rotates between Palo Alto / Mountain View and San Francisco.

I enjoy living in the middle of the Peninsula (in the Valley) and commuting up to my office in SF a few days per week. This way I can meet anyone anywhere. It’s extremely rare for me to take a business meeting in the East Bay or north of the Golden Gate. I try not to go south of Mountain View if I can avoid it.

With all of that said, this is a beautiful place and living anywhere in the SF Bay Area is cool. Things get cheaper when you get off the Peninsula and out of SF. You just might spend a lot of time in your car.

BTW, we do most of our evening events in SF these days as it’s the center point for Silicon Valley, East Bay, Marin and SF to meet in one place. Feel free to join us for our next event in SF May 24th at 5:30 pm with a great panel talking about alternative paths to liquidity for founders, early employees, angels and VCs. We will serve food and drinks and lots of time for networking with about 100 VCs, angel investors, entrepreneurs and bankers.

Register here: https://altliquiditysf.eventbrite.com.