As More Startups Move To San Francisco, Y Combinator Opens A Satellite Office In The City

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Y Combinator has been a mainstay of Silicon Valley, with an office not far from the Mountain View Caltrain station.* Over the years, however, the seed-stage venture firm has seen more of its companies and partners take up residence in the city. As a result, it has opened a small satellite office near San Francisco’s Union Square neighborhood¬†to support SF-based staff and partners who need temporary space to work out of.

There’s a growing trend of startups being founded in San Francisco, as younger tech workers are looking for more excitement after hours than might be found, in say, downtown Mountain View. Whereas a decade ago it was expected that companies like Twitter and Square want to be near Stanford and Sand Hill Road, newer startups are becoming comfortable with the idea of settling down in the city. And investors are coming to them.

Y Combinator already has a number of big success stories based in San Francisco — both Dropbox and Airbnb, for instance, have spacious new offices in the SOMA neighborhood. But the incubator is looking to support more San Francisco-based companies, as the appetite among tech workers for city living continues to increase and as jobs here become more plentiful.

At the same time, it’s brought on more part-time partners over the last few years, many of which are based in San Francisco. That includes folks like Socialcam’s Michael Seibel, Hipmunk’s Steve Huffman, App.net’s Dalton Caldwell, and Groupon’s Andrew Mason (who recently moved to San Francisco from Chicago).

Y Combinator hasn’t always just been in Silicon Valley — it used to have classes in both Silicon Valley and Cambridge before founders Paul Graham and Jessica Livingston decided to stay on the West Coast year-round. But the new office, which opened its doors early last month, follows a larger trend of VC firms and investors looking beyond their stodgy Sand Hill Road digs to meet with and support a growing number of startups making San Francisco their home.

Firms like Benchmark Capital and Kleiner Perkins set up offices here. Early next year, 500 Startups is also opening a San Francisco office, which will be run by new venture partner Parker Thompson and is expected to house one track of its accelerator program.

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* My colleague Anthony Ha maintains that the YC Mountain View office is “not that close to Caltrain” and “actually a really long walk.”