Venture capitalist Fred Wilson has expanded on my earlier post related to the relationship of venture capital and geography. He outlines some concrete examples of board meetings and other f2f items that aren’t as effective remote. People shouldn’t get too discouraged by "location, location, location", however. Venture capital is not exactly real estate, but geography surely plays a strong role (accentuated for early-stage ventures) in ways too detailed to go into here.
As an additional note, remember that VCs are also networked, networked, networked. In a prior post, I related a prior recruiting encounter with a VC in another geography as brokered by a VC in a different geography. I’m not even sure my contact information was public at the time when the brokering occurred. Deals and information of all kinds get passed around (hopefully, not passed on). So one can’t give up just because of geography. Just be very sensitive to it and recognize the customer concerns.