People are moving their startups from Minnesota to the Dakotas? Does your startup need hundreds of square miles of empty land?
On a serious note, the people in the midwest are wonderful and it would be great if there were more opportunities to launch and build startups there. But you need to build a critical mass of entrepreneurs, investors, advisors, and resources that will nurture such startups and, without that, it will remain hit or miss for any given locale that supports only intermittent startup activity. The good news is that it is possible to launch from such places (where, even a decade ago, this would have been almost unthinkable). As this piece points out, though, it is not easy to sustain the company beyond the earliest phase without the connections and resources that will facilitate growth.
As for talent, I've learned to be patient. The right people do come along if you wait. I've posted jobs several times and I get new applicants each time that restore my faith in the local community.
Finding investors is pretty doable here from those around me that have received outside funding (my company is friends and family right now), and there is a noticeable interest from the government, the university, the community, and investors, in growing Madison to become a hub of innovation.
Finally, one big thing I've noticed is how under served the community is with the whole web 2.0 thing (non techies don't have time for another website). People here really value a personal touch. Couple that with less local competition and there is a lot of opportunity here.
It must have been many years ago. Today it is part of the union and is actually 2 states, North and South Dakota.
Kidding aside, I don't see either state as a real Mecca for start ups. The money is on the coasts. The people with the know how to get big name recognition are on the coasts.
If you want to start a bank or a paper box company, SD is cool. If you want to build a startup that needs facetime with angel investors and social ties to facebook, et al, I don't think the midwest is the place to be.
On my way back from Alaska in a couple of months I'm going to take a detour east to setup my domicile in South Dakota (I want to see Mount Rushmore and the Crazy Horse monument, anyway). It will save me at least a few thousand dollars next year.
Haters going to hate?
Here goes, taxes are lower in South Dakota.
http://www.taxfoundation.org/research/topic/37.html
"Minnesota ranks 43rd in the Tax Foundation's State Business Tax Climate Index."
"Neighboring states ranked as follows: North Dakota (25th), South Dakota (1st), Iowa (46th) and Wisconsin (42nd)."
"Minnesota's 2008 state-level individual income tax collections were $1,493 per person, which ranked 5th highest nationally."