A BRIEF HISTORY OF LAVA
by Duke Bristow and Thomas West
Like many successful professional associations and like the growth companies it serves, the Los Angeles Venture Association, most often known as "LAVA", had a very humble start but quickly grew to become a central and enduring part of Southern California's business community.
LAVA held its first event in 1985, drawing fewer than 10 people to the conference room of a law firm. In April 2001 our annual Investment Capital Conference drew over 1,100 people to the beautiful Westin Bonaventure Hotel in downtown Los Angeles. Our monthly breakfast meetings routinely draw over 100 attendees and are held at the Regency Club in Westwood.
The formation of LAVA
Some of the inspiration for LAVA came from movie star and award-winning director Robert Redford. In 1984, attorney Reg Gipson was managing some of the famous actor's investments. Three years earlier, Redford had launched his Sundance Institute, an organization that, in his own words, was "dedicated to the support and development of emerging screenwriters and directors of vision." As Gipson and Redford discussed his investments, Redford pressed Gipson to be more "creative" in locating alternative investment opportunities. This conversation was the seed that would grow into Southern California's oldest and one of the largest venture associations, the Los Angeles Venture Association.
In the fall of 1984, Gipson, a partner at the law firm Gipson, Hoffman & Pancione (GHP), began to search for an organization in Los Angeles that might bring together investors and entrepreneurs. Gipson found none in Los Angeles. However, during his research he learned of an organization in Connecticut called the Connecticut Venture Club. After contacting them and learning that they did not have a Los Angeles affiliated organization, he took it upon himself to start forming what would first be called the "Los Angeles Venture Club."
At the same time, Gipson had gotten to know Irv Spira from IBM through corporate finance transactions in which they were involved. Spira introduced Gipson to Dick Israel, a local investment banker who had met Spira through UC Berkeley Alumni Association events. Israel had been a member since the early 1970s of the local chapter of the Association for Corporate Growth (ACG). Based on his experience there, he believed that a Los Angeles Venture Club would complement ACG and provide a great service to the local business community.
In 1984, the wheels began to turn. LAVA held an informal planning meeting in the fall 1984 in the GHP conference room. The attendees at that first organizing meeting included Reg Gipson, Dick Israel, Irv Spira, and Ken Crews, a partner from Gipson's law firm. The Articles of Incorporation were executed by Lesslee Etzwiler and signed by Robert E. Gipson as President and Kenneth D. Crews as Secretary. The articles were certified by March Fong Eu, Secretary of State of the State of California, on June 10, 1985. Article I established the name originally as the "Los Angeles Venture Club," a non-profit mutual benefit corporation. This name would remain as the official name for almost a decade but all who knew the organization continued to call it the Los Angeles Venture Association. Article II, Section B established the legal purpose as "The specific purpose of this corporation is to educate people in the knowledge necessary to the establishment and growth of business ventures."
The purpose has remained to this day. On December 13, 1994, David Morgan, as president, and Thomas B. Liesy, as secretary, filed a certificate of amendment to change the official name to Los Angeles Venture Association. Tony Miller, Acting Secretary of State, certified the name change on January 1, 1995. According to a letter dated July 31, 1990, and signed by F. C. Milaflor of the Internal Revenue Service, the IRS granted LAVA its current tax-exempt status as a "Business League" under Internal Revenue Code section 501(c)(06) from December of 1986.
The early years
Although the first LAVA meeting drew only a handful of entrepreneurial souls, the number of participants grew rapidly as each member brought friends and colleagues to the monthly breakfast meetings. Rapid growth could also be attributed to the "entrepreneurial business groups" that were then being formed at the then "Big Eight" accounting firms in Los Angeles. Soon, LAVA's size became too large for GHP's conference room and meetings were then moved to the Pacifica Hotel, now the Radisson Hotel, on Slauson Blvd. near Los Angeles International Airport.
The oldest available minutes of any LAVA meeting were taken at a board meeting at the Pacifica Hotel in Culver City and were dated December 17, 1985. Dick Israel acted as chairman and Pete Osterhous as secretary of the meeting. The following members of the board were present: Roger D. Chittum, Lawrence A. Erbst, Peter H. Griffith, Diana L. Ho, John LeConte, Leslie Schwarz, and E. Irv Spira. Robert E. (Reg) Gipson and Bruce P. Vann were out of town and there were no others in attendance. Among other business conducted at this early board meeting, the dues were increased from $40 to $50 per year, student admission was set at $10, and M. Freddie Reiss presented LAVA's first budget.
By the January meeting, LAVA had its first administrator, Ingrid A. Kingaard. In April of 1986, the minutes reflect that one of the founders, E. Irv Spira, then VP of Membership, had passed away and that $100 was donated in his name by LAVA to the City of Hope. That same month, the LAVA board entered into its first collaboration and proposed to co-host an event with the Asian Business League that was to feature Wendy Lee Graham as the speaker.
LAVA has worked well with other organizations from the very beginning. Support for local universities has always been a feature of LAVA; Gipson was named as LAVA's representative on the UCLA/MIT Venture Forum advisory board. The UCLA/MIT Venture Forum operated for eight years having begun in the early 1980s at UCLA under the supervision of Professor Hans Schollhammer. This Venture Forum held its meetings at what was then the UCLA Graduate School of Management, now the Anderson School at UCLA, until the forum moved to Caltech and re-organized as today's Caltech/MIT Enterprise Forum. The first venture capitalist to serve on LAVA's board, Gene I. Miller, was added to the board on May 13, 1986. Mr. Miller was Managing Director of Peregrine Ventures, a venture capital fund founded in Los Angeles in 1981. May of 1986 was also the first meeting at the Bel Air Sands Hotel, now the Summit Luxe Bel Air. By June 30 of 1986, LAVA's first treasurer, Freddie Reiss reported that LAVA had $5,599.37 in the bank. LAVA earned $12,780 in member dues though the first six months of 1986. That same month, Mr. Reiss reported on the collaboration with the Orange Coast Venture Group. In July of 1986, William Cyril was added as a director.
From this reconstruction, the first known program of an educational forum was discussed at the July board meeting and scheduled for October 14, 1986. This program featured Brent Rider and David Jones who were originally with Union Venture Corp. and later with El Dorado Ventures. Gene Miller and Schuyler Moore, Esq., were scheduled for November to make a presentation on the impact of the new tax bill. John Fink and Frank Kilpatrick were planned as the featured speakers at the December 9 meeting. They discussed "Financing for Emerging Businesses," a topic as timely now as then. Lee Stein was responsible for all public relations and developed the first brochure "which reflects the Club's intent and purpose." Gipson clarified LAVA's objective: "To help people turn good ideas into successful businesses."
Service to the venture community
In October of 1986, Ms. Leslie Schwarz of Price Waterhouse, served as chairperson for the first nominating committee; she collected 17 nominations in the first election for 12 board of directors positions at LAVA. The elections were held in November of 1986. The candidates were:
| Victor Bremson | President | Victor Bremson & Associates, Inc. |
| Devon Blaine | President and CEO | The Blaine Group, Inc. |
| Roger Chittum | Partner | Rosenberg, Chittum & Hobbet |
| Diane Comi | Attorney | Wood, Hucksinger & Epstein |
| Lawrence Erbst | Entrepreneur | |
| Peter Griffith | Ernst & Whinney | |
| Jim Hall | President | Investment Matchmaker |
| Diana Ho | Senior Consultant | Management Systems Consulting |
| John LeConte | CPA | Ernst & Whinney |
| Gene Miller | Managing Director | Peregrine Ventures |
| Pete Osterhaus | Entrepreneur | |
| M. Freddie Reiss | Partner | Oppenheim Appel Dixon |
| Thomas Rozsa | Partner | Tilles & Webb |
| Antonio Santillan | President and CEO | Winning Visions, Inc. |
| Ira Spilky | President and CEO | Ira Spilky & Associates, Inc. |
| Lee Stein | Ozmund Communications | |
| Richard Thiel | Professor | USC |
The board then elected its officers that included a president and four vice presidents. The four VPs were responsible for Membership, Programs, Business Plans, and Communications. To provide some continuity, six board members were elected for one-year and six were elected for two-year terms. The board resolved not to pay honoraria but to reimburse reasonable travel expenses. From the third that first board to this writing, Ms. Devon Blaine has served on every LAVA board. Ms. Blaine has also served as LAVA president and a vice-president several times and remains active in organizing LAVA's Annual Venture Capital Panel.
Soon after the 1986 elections, board meetings and breakfast meetings were relocated to the then Sands Hotel on Sunset Blvd. at the 405 Freeway (now the Summit Luxe Hotel) to reduce travel time for those members coming from the San Fernando Valley. Breakfast meetings remained at the Sands, later the Summit, until 2000 when the meetings were moved to the location at the Rivera Country Club, and then moved in January 2004 to the Regency Club in Westwood. Board meetings have moved several times over the years most often occurring in Century City in the board rooms of law, accounting and other professional services firms.
Supporting and educating entrepreneurs
The focus of LAVA from the very beginning was two-fold. First, LAVA was a forum that brought potential private equity, venture and angel investors together with entrepreneurs looking for funding. Like the Band of Angels in Northern California, the Tech Coast Angels, the Pasadena Angels, and other angel groups of today, early meetings consisted of primarily angel-type investors listening to short pitches from entrepreneurs about the merits of their business ideas. The business plans were screened by Diana Ho and later by a group she led before the plans were presented to the membership. The ideas were then subjected to questions and the entrepreneurs left better informed than when they arrived. Some "memorable" early pitches included:
- A videotape business whose producer worked with an ex-convict to sell tapes on how people could improve their home security.
- A small-footprint, all-drive-through fast-food restaurant (sounds like In-N-Out Burger).
- A dog dish with a lid attached to a timer that would open and close to feed the dog the right amount of food while the dow-owner was away on vacation.
LAVA, however, was not only focused on matching investors with business ideas. The second focus LAVA was to educate and build an enduring business community of venture-minded individuals in the Los Angeles area. To emphasize this point, at every LAVA meeting all attendees were given the chance to introduce themselves. This is a tradition which, when the audience is a manageable size, remains today.
LAVA saw a need to educate entrepreneurs on how to quickly present their ideas to private equity investors. One way that LAVA helped was to give entrepreneurs one to three minutes to present their business plan at LAVA meetings. Not only did this give entrepreneurs a forum, it also forced them to refine their plans to their essence. Further, LAVA created workshops to help entrepreneurs improve business plans. LAVA also created panel discussions, providing both entrepreneurs and investors with insights into understanding the nuances of the venture world. One of the longest running workshops is the Annual LAVA Venture Capital Panel. This panel series began in August of 1987.
LAVA continued to grow steadily through the late 1980s and into the 1990s. By the early 1990s, LAVA had generated a strong following in the private equity community and had achieved some stature. This was evident not only by the membership - which began to include prominent then-big fund participants such as Peregrine Capital - but also the guests who spoke at LAVA's meetings which included then-venture capitalist and now former Los Angeles Mayor Richard Riordan. Mr. Riordan's venture investing includes the turnaround and growth of many small, middle-market and large ventures ranging from Sandpiper Networks to Mattel.
Speakers and panelists have spanned a broad range of geography and backgrounds and companies. Speakers over the years have included such a diverse list as Arthur Lipper III, then editor and publisher of Venture Magazine, Jane Applegate, syndicated columnist, Dr. Al Osborne, director of more than a dozen companies and founder of the Anderson School's Harold Price Center for Entrepreneurial Studies, Steve Sansweet, then Wall Street Journal Bureau Chief, Brad Jones, Partner at Brentwood Venture Capital and now Partner at Redpoint Ventures, Don Sessamen, then president of Nextlink California, Joe Sugarman, direct marketing expert, Anthony Parinello, author of best-selling book, "Selling To VITO," Dr. Jack Kyser, often-quoted economist for the LAEDC, Jeff Ullman, founder of Great Expectations, and Bill Stensrud, managing director at Enterprise Partners
The Annual Investment Capital Conference
LAVA has attracted national attention most often for its annual Investment Capital Conference. The "ICC," as it has come to be known, was the brainchild and a labor of love of long-time board member and prior LAVA President, Michael Donahue. Since a strong first program in 1994, the ICC has grown into a regional treasure for LAVA and the business community of Southern California. Mr. Donahue's co-chairs for the ICC have included Kevin Shultz, who has personally brought in dozens and dozens of great sponsors, as well as past LAVA president Larry Moreau and long time LAVA board member Wally Eater. In addition, this annual event benefits from guidance from the ICC Steering Committee made up of a dozen leaders in the venture community.
The ICC has grown to become one of the largest supply-side capital conferences in the US, certainly the largest in Southern California. At the ICC, the presenters are capital sources themselves and experts on various sources of capital, from seed to IPO to M&A. The audience is a rich mix that contains a good combination of CEOs, CFOs and entrepreneurs from firms seeking capital at all stages of growth. In 2002, the ICC, held at the Westin Bonaventure Hotel in downtown Los Angeles, had over 60 speakers and 70 sponsors covering almost every aspect of capital raising.
The first ICC keynote speaker was Nolan Bushnell, then Chairman of OCTuS, previously founder of Pong, Atari, and Chuck Cheese Pizza Time Theaters among others. Those in attendance learned how Mr. Bushnell turned less than $1,000 into a firm with over $300 million in revenue. Each year's ICC has been memorable in its own way and has reflected the state of the capital markets through good times and bad. Other ICC keynotes and featured speakers have included Steve Forbes, editor and chief of Forbes Magazine and president and CEO of Forbes Inc., Jack Kemp, former vice presidential candidate, co-director of Empower America, former Secretary of Housing and Urban Development and former US Congressman, and former quarterback for the San Diego Chargers and the Buffalo Bills, Bill Gross, founder and chairman of idealab!, Tim Draper, of venture capital firm Draper Fisher Jurvetson, Leo Spiegel, general partner of Mission Ventures and former President & CEO of Sandpiper Networks, Stuart Varney, VP of Keppler Associates Inc., Donald Straszheim, former chief economist of Merrill Lynch and now vice chairman of the Milken Institute, Regis McKenna, Chairman of the McKenna Group, and Debbi Fields, founder of Mrs. Fields Cookies.
One of the most memorable was Bill Stensrud's morning keynote presentation in 2001, "The Coming Nuclear Winter in Venture Capital." Mr. Stensrud's then-shocking forecast was the first to predict a sharp decline in venture capital investments, especially in telecom, and his look ahead turned out to be so accurate it was almost prophetic. For the 1,100 people in attendance, listening to this forecast was like a "taking a swim in a pool filled with ice." The presentation was invigorating yet bone-chilling. But Mr. Stensrud was right on the money and early to sound the alarm and those who listened were well informed of what was yet to come.
As with most LAVA events, the annual ICC, the more recent and frequent Investmet Capital Seminars, and the long-standing LAVA Breakfasts all help to prepare entrepreneurs and other business leaders for the road ahead -- whether bumpy or smooth. What will the next history of LAVA tell? Please join us and be a part of making that history your own. Everyone has always been welcome at LAVA.
Duke Bristow and Thomas West of the Anderson School at UCLA originally wrote this history of LAVA in June 2002. The authors thank Reg Gipson and Dick Israel for much of the material presented here, David Morgan and Bob Pearlman for making available the minutes of early board meeting, and Devon Blaine for significant contributions and corrections. Remaining errors are the responsibility of the authors.
If you know a story about LAVA in the early years or would like to correct an error in this history, please email Dr. Bristow at dbristow@anderson.ucla.edu.
