See, it's points like that that irk me. As though somehow leaving SV is abandoning your business!
Amazing how much people will pay lip-service to remote work and to the importance of other startup communities and then balk at people pursuing their ideas in "flyover country".
Moving to Minnesota is fine. By if you moved to SV to start a company, what changed that made you realize SV wasn't a good idea? The declaration has "but" in the middle; what are you running away from?
Rent maybe? There are lots of good reasons to run a startup in SV, NYC, etc. Direct access to capital, certain types of talent, and so on. There are also reasons to not run a startup in places like that. Cost of living as it relates to runway length being the biggest one. Some startups simply need a place to sit and a reliable internet connection.
If you've come to the realization that you don't need any of the things big cities have to offer as it relates to your business, moving back to Minnesota or wherever is exactly the right call.
Early on, I thought about doing one fairly close to MIT to get talent from over there. Many businesses come outbof that school. So, I figured a bunch of other people are doing it already.
Successful web startups are based in SV because to be a successful web startup, you need LOTS of money to burn on marketing and promotion. To get lots of money to burn, you must get investors with the appetite for watching their money burn up. Those investors have built out SV as their nexus not due to any magical qualities of the place, but primarily for personal convenience (traveling sucks, etc.).
The VCs in not-SV do not allow startups to run anywhere near the same way as the SV guys do, despite their attempts to imitate the YC model (most of which are, IMO, outright fleeces on naive locals). Non-SV VCs are just used to doing much more traditional deals, not seed-stage tech financing.
The people who want to start VC-backed companies thus have to trek out to SV, and then once they're established, they stick around because that's convenient for them too.
If you can decouple from the VC ecosystem, or if you can find good local VCs that know the field (and you probably can't), there is every reason to NOT start in SV.
Everything YC does should be viewed through the reality that YC is an investor. Their interests are not necessarily aligned with the interests of founders, and as the party with the leverage, they can mandate that people move to SV solely based on their personal convenience.
I personally see starting in SV as more of a detriment than a benefit, but then, I'm not trying to start a company that depends on venture capital. In non-SV locations where I know some startup people, VC-backed startups would routinely fly out to SV for pitches and the like, and many had an easy time finding investors after being roundly rejected by the VCs in their particular area.
Investors really don't seem to realize the treasure trove that could be available to them if they broadened their horizons a little bit, but maybe that's because there's really no incentive for them to disrupt what they have going on now. Everything is quite convenient for them with SV as the nexus.
Also, there are plenty of investors that realize this, you just have to look for them. For example, Drive Capital in Columbus, OH was founded by ex-Sequoia in 2013 and has raised over $500M since.
If you are moving back for other reasons and the startup continuing is a secondary thing then it sounds bad. Moving in itself doesn't sound bad.