I have been reading articles by Paul Graham on start ups and am currently in the process of deciding where to incorporate. What baffles me is that most tech startups move to SF early on when the founders still have no real money for the move, is it advisable to be in the SF area? I live by LA and southern California is definitely filled with many creative people and competition can be fierce as well. But as one who is trying to gain funding, is it advisable to actually be up north to be noticed?
Most investors want to be physically near where you are.
That doesn't mean SF unless you want SF investors.
Sometimes people get funded remotely but it's the exception.
Things to note about the SF Bay Area culture:
Having said that, Jason's follow-up comment is entirely correct. Just moving here isn't a guarantee - you'll still have to do the leg work (maybe much more leg work!)
Arguably, any location with a historic culture of innovation (SF, Boston, Austin for example) will be a great incubating place for your venture, but these are not the only places (Boulder, Provo and the Research Triangle come to mind).
One thing would be for you to do some research about what kind of industry/customers you are trying to reach - if it turns out LA is a good market, you are bound to find an investor who's "been there, done that" and willing to listen to your pitch.
I noticed a suggestion to use AngelList if you planned to move to SF. First of all AngelList has investors from all over the world so most likely also in your neck of the woods. That said please take a quick look at another thread involving AngelList as it outlines some of the big concerns using it.