Why can't `virtualenv` find `pkg_resources`?

I had the same problem when trying to run virtualenv, found out the virtualenv was installed in /home/{user}/install/lib/python2.7/site-packages while the python was pointing to /home/{user}/install/bin/virtualenv - you should know this by running

which virtualenv

So I had to uninstall and reinstall virtualenv

pip uninstall virtualenv 
pip install virtualenv

This worked for me.