Typically, angel investors are participative investors. I.e. apart from the money, they provide mentoring and advice to the startups they invest in. Hence, the preference is to invest in companies that they could meet fairly regularly. In fact, startups should seek angel investors, or at least some of the angel investors in case of an angel group investing, to be from their city.
As the concept of angel investing becomes more popular, a number of angel investors who co-invest in deals are open to investing in companies that are not close to their location. However, it will be in the interest of the investors as well as the startup to have at least the lead investor in the city where they are based.