Because the product of your company is your companies' shares, and the people who buy those shares are in Silicon Valley.

You can, just be remote first [1]. Hashicorp, Gitlab, Zapier, are some examples that come to mind, but there are more. Interestingly, I interviewed at Lockheed Martin and they are very remote friendly for some departments and roles (much to my surprise).

[1] https://www.levels.fyi/remote/ (example, not comprehensive)

There are lots of tech companies in the Midwest or South.

The LCOL issues would be the lack of local employees that you can find. So if you go remote heavy… what was the point of going LCOL?