Well, to start, the rest of the world outside the Silicon Valley bubble (including other "startup" hubs) call new companies "small businesses".
There is a very good distinction here. Small business implies that your business is one that HAS to make money. Sure, it's not a lot. It may be a side job. But it is a business that has an actual plan from day one to make money.
Small businesses are still the backbone of the U.S. and make up for the majority of all employment. Most of them don't raise "VC" money, many of them start with a loan, or the wonderful "friends and family" money. When they fail, it is bad. Friends and family may stop talking, property may be repossessed by the bank, etc. The founders who take VC money are usually young and in tech. The risk they take is nothing compared to the people I stated above. It's actually hilarious how out of touch the SV "start up" world is with how most businesses are created. I'd even say that this is a large reason why the failure rate of companies with VC money is so high, it's mostly tech, mostly young people who can fail and be standing on their feet regardless, and these kids have never had to make ends meet in respect to running a business.
Of course, there is a place for VC money and the type of companies that are created from taking that money. Many businesses would be far too risky to put your house/family/entire life on the line if it fails. However, I see so many companies that took VC money, moved to SF, hired a bunch of extremely high paid employees, thus have to provide crazy benefits, and their burn rate is now under a year... and they haven't made a single dollar yet!! Insane.
With the same amount of money they raised, I can start up in Texas, Atlanta, Chicago, Denver, etc, hire as I need, have an office with a much lower cost, and increase my run to several years, if not more. The advantages you get from being in SF are easily wiped out when you give a company 2-3+ years to succeed, rather than 6 months - 1 year in SF.
Another thing I've seen is that these small businesses are usually started with the people that actually have expertise in the field they are in or are more likely trying to solve a problem they themselves have. I think that is important for a founder/s. Many founders in the SV world have no clue about what they are doing. They simply have tools (tech), and are looking to put it into whatever they brainstorm. Much of the time, they do not understand the problems they are trying to solve, or are solving problems they aren't important. Another reason for the high rate of failure with companies that take VC money.