Tracey Lien reported in today’s Los Angeles Times that, “Most Bay Area venture capital firms keep an eye on local colleges so they can fund campus start-ups before they take off.

“The House, a new ‘start-up institute,’ wants to get in even earlier.

“Cal alumni Cameron Baradar and Jeremy Fiance set up shop this week in a 7,000-square-foot space across the street from UC Berkeley to support Cal students and faculty before they even have a start-up.”

The article explained that, “The House, which stands separate from the House Fund — a $6-million venture capital fund Baradar and Fiance announced in April — will help students and faculty turn their research and ideas into companies by identifying business opportunities, putting founders in touch with legal and financial resources, offering access to advisors and mentors, and also providing a place to work.”

Today’s article added that, “‘There’s a need for a new type of organization at the intersection of start-ups and universities that is purpose-built for a university setting,’ said Baradar, a 23-year-old Orange County native.

“According to Baradar, start-up accelerators that work with company founders for three months simply aren’t built for universities, where students spend two to six years on campus.

“The House is a flexible alternative, Baradar said, where students and faculty can apply to be part of the program and get the support they need without the pressure of launching a business, securing funding or following an arbitrary timeline. The services are offered free — no strings attached.”

The L.A. Times article also pointed out that, “Even if companies coming out of the House don’t end up being funded by the House Fund, [Erez Cohen, an advisor to the House who founded and sold his mapping start-up, Mapsense, to Apple last year] believes the program will be a boon to the Cal start-up community.

“‘When I was a PhD student, I didn’t have any sense of what Silicon Valley was like, what it meant to raise money or have a demo,’ he said. ‘A program like this would have helped me a lot.'”

Telis Demos and Peter Rudegeair reported in Monday’s Wall Street Journal that, “Federal and state regulators are increasingly scrutinizing partnerships between banks and online lenders, reducing some uncertainty about the rules in an area where the startups have thrived.

“Financial-technology upstarts such as LendingClub Corp., Avant Inc. and Prosper Marketplace Inc. have raised hundreds of millions of dollars in funding partly on the premise that they can offer borrowers better terms than banks, which must shoulder larger compliance burdens.

“The startups’ regulatory advantage may be fleeting. Last month, the Federal Deposit Insurance Corp. proposed guidelines, including one that banks that partner with third-party firms to make loans ‘will generally receive increased supervisory attention.'”

Yesterday’s Journal article noted that, “That may enable increased scrutiny of online lenders even though they aren’t banks.

“The proposed change adds to a flurry of legal activity and state regulatory moves to curtail the ability of the young firms to bypass state laws. The scrutiny also aligns with a broader effort by U.S. watchdogs to focus on risks of banks using outside partners.

“Though the FDIC has had guidelines for relationships between banks and outside vendors, the new proposal focuses specifically on lending partners, including proposing yearly examinations rather than every 18 months. It also recommends that banks should set ‘performance standards for third parties’ and ‘require access to data.'”

The Journal writers added that, “The FDIC is seeking comment on the proposal.”

Conor Dougherty reported in Monday’s New York Times that, “Three years ago, Kate Rogers was caught in the Bay Area struggle. She paid the astronomical rents. She did the crushing commute. She lived the frustration of always thinking about money even though she was a well-paid professional in the booming technology industry.

“And then, just like that, the stress went away. All she had to do was move to Arizona…[A]s start-ups across San Francisco and the Silicon Valley try to contend with high salaries and housing costs, many are expanding to lower-cost cities in the West and employing more people like Ms. Rogers. For Phoenix, which is about a 90-minute flight from San Francisco, the Bay Area’s loss is its gain.”

Mr. Dougherty indicated that, “At the end of last year in the Bay Area mega-region — including both the San Francisco and San Jose metropolitan areas — there were 530,000 tech and engineering jobs, a 7 percent increase from a year earlier. Phoenix has about one-fifth as many tech jobs, but the total grew 8 percent from a year ago, according to Moody’s Analytics.

“‘The Bay Area’s explosive growth is almost too much for the region,’ said Jackson Kitchen, an analyst at Moody’s Analytics. ‘They are bidding up wages so high that companies are saying, ‘Let’s expand to Phoenix or Boise or Salt Lake City where wages and real estate are that much cheaper.””

Graphic from The New York Times

Graphic from The New York Times

Mr. Dougherty also pointed out that, “Wages, taxes and energy cost about 25 percent less in Phoenix than they do in San Francisco, according to an index of business costs compiled by Moody’s Analytics.

“Housing is much cheaper. The median home price in the Phoenix metropolitan area is $221,000, according to Zillow. In San Francisco, it is $812,000.”

Yesterday’s article added that, “Hordes of young dreamy entrepreneurs still flock to the Bay Area each year in search of venture capital. Silicon Valley is to tech entrepreneurs what Hollywood is to actors, and the region continues to significantly outpace the nation in creating engineering jobs.

“But as companies grow and add large numbers of sales and customer service jobs, ‘it’s less about survival and having everybody in the same room,’ said Lawrence Coburn, chief executive of DoubleDutch, a San Francisco maker of software for live events that recently laid off a quarter of its staff to try to become profitable sooner.

“This year, the company opened a downtown Phoenix office with sales and customer service jobs. ‘San Francisco is a terrible place for entry-level people,’ Mr. Coburn said, because the infrastructure and housing are ‘failing.'”