Earlier quoted context omitted.
Easier to invest into something if you only have a short car drive to the company you're investing in; additionally everything cross-border involves a lot more effort with coordinating taxes. In any case at least YC does invest into European companies [1] - the key thing is you have to get far enough to have a meaningful product that VC funds can invest in, and unlike the US we don't have a lot of billionaire former…
Are you saying they'll miss out on a multi billion dollar profit opportunity because "it's not a short drive". Many VC firms have European offices, there's Zoom or a plane flight. Cross border investment is not a new or alien thing so dealing with taxes or regulation isn't something they can't cope with. So money not being available isn't a convincing reason.
Not "miss out" per se, rather a "prioritize companies in close proximity". There's a reason why a lot of the former startup turned unicorns are all concentrated around the Silicon Valley.