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I think this would actually be viewed positively if you spin the story the right way. Don’t leave that space blank on your resume. I’d actually put it on there. I’d also write about this time and what you learned from it in your essays. Schools like to see people with traditional experience take some risks
This wouldn't even be a gap and is a positive. You were actively working on your startup during that time.
Put in on there!!!!!
Mentor
You took a risk and looked to grow but it didn't pan out as you had hoped/expected. Perhaps your start-up stint informs the direction you want to take post-MBA. Nothing to be ashamed of. Own it.
It allows you to differentiate yourself from other consultants who never tried anything else.