My Family is from Pittsburgh, I went to CMU for undergraduate and then graduate school. I helped found/bootstrap a video game company there that did quite well for a few years form 2009-2011. The city is manageable, quirky, tolerant, fun, and affordable. I agree with everything PG says here... including the lack of funding. I was with ModCloth when they had to "move the core team to SF to get investment". My video game company's troubles can be traced to lack of funding (and the CEO used too much personal capital remain objective).
I would add one more negative: a bad airport. The Pittsburgh airport used to be a world-class hub for US-Airways and offered a ton cheap flights everywhere. A good airport is important for attracting talent and business... now this huge airport is less than 1/2 utilized and due to poor mass transit, it's hard to get to (I guess Uber is fixing that for the city). You could be in Philadelphia, DC, and NYC within an hour... but I always opted to drive to save on those overpriced domestic flights tier-2 airports are known for.
There are investors in pittsburgh (like http://www.bluetreealliedangels.com), but they aren't used to investing in "digital" tech. There are some early-stage incubators (http://alphalab.org and some others) but they don't have the network reach to justify their high stake in the company. I would argue that capital exists, but isn't as loose as it is out west. The folks who have it aren't as risky... which might be because they don't have as much to play with, but I think it simply is that they aren't used to the type of businesses Silicon Valley is starting... and that seems too risky.
https://en.wikipedia.org/wiki/Pittsburgh_International_Airpo...