Agreed that Urbana-Champaign might not be the best place to start a company but that doesn't mean students can't start ventures while on campus and then move them elsewhere after graduation. We've been seeing that a lot recently.

Additionally, there are some benefits for startups that stay in town. Rent is extremely cheap (you can get your own bedroom in an apartment for ~$300/month) and you get access to a lot of talented students coming out of the university.