Pioneer of Angel Investing Dies – Honoring Luis Villalobos

  

Luis Villalobos, pioneer of angel investing, died October 01, 2009 in Orange County California. He was 72.

Posted By Robert W. Price

I first met Luis in the mid-1990’s when I was teaching entrepreneurship classes at Pepperdine University in Southern California. I had just completed my MBA at Pepperdine, and as a graduate student I created a unique program for educating entrepreneurs.  We actually called it a “bootcamp” in my class work. It became the first formal certificated entrepreneurial management program. There were few educational resources available for entrepreneurs at that time. But we had created “real-world” curricula, program materials, and invited domain experts as guest lecturers to support our lesson plans.

Well, after one of my Saturday morning classes, the program director suggested that I stick around to hear the guest lecturer for the afternoon. It was Luis. He talked about his grand vision for creating a new network for angel investors in Southern California. I was fascinated. I was sure he was going to succeed. And succeed he did. His ideas for the network became Tech Coast Angels, TCA. Since it’s inception in 1997 more than $1 billion has been invested in TCA’s portfolio of start-up ventures.

Luis was a social entrepreneur too. He helped me refine my original ideas for the entrepreneurial management program. These ideas gave birth to the Global Entrepreneurship Institute, a non-profit 501(c) 3 educational organization with the specific mission of advising and educating entrepreneurs around the world. We immediately started producing entrepreneurship textbooks and course materials to fuel the growth of academic programs teaching entrepreneurship. I am very proud to say that our latest work, the sixth edition of entrepreneurship now published by McGraw-Hill, is due out later this month.

And his support continued. For most of a year I had exclusive, behind-the-scenes, access to TCA activities. I traveled their networks in Southern California. I attended their investment meetings, and I interviewed angel investors and entrepreneurs. The result of this comprehensive research was Roadmap To Entrepreneurial Success, a book published by the American Management Association in 2004.

Our Roadmap book was very well received around the world. We are now the trusted source for educating and supporting entrepreneurs. Our books and course materials are used in the Top 10 best graduate programs in the USA that teach entrepreneurship, and 8 of the Top 10 best undergraduate programs in the USA that teach entrepreneurship.

For many years Luis and I discussed ideas for creating a larger, national network of angel investors. The seeds for these ideas were planted. And what grew was a new network, now known as Angel Capital Association (ACA), which is a network of networks and groups of angel investors in North America. The Kauffman Foundation and the Angel Capital Education Foundation (ACEF) now support the ACA. ACEF is a charitable organization devoted to education, information and research about angel investing for investors, entrepreneurial support organizations, university faculty and students, and policy makers.

I will share one fond memory of Luis. It was after visiting with him at his house. He walked me through his garage and I saw a Porsche Turbo sports car. I asked, “Wow Luis! What are you doing with a hot car like that?” With a sparkle in his eye, and after a short pause, Luis replied, “Robert, it’s important to have fun too!”

Luis was a true visionary! Thank you Luis, for all you have done for entrepreneurial capitalism in the USA and for entrepreneurs around the world!

Robert W. Price
Executive Director
Global Entrepreneurship Institute

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About Luis Villalobos
“He had a vision for Tech Coast Angels when no one in Southern California thought something like this could happen,” said fellow TCA member Sid Mohasseb. “He was always the glue that kept the organization together.”

In 2007 Luis received the Hans Severiens Award. The annual award, jointly sponsored and presented by the Angel Capital Education Foundation and ACA, recognizes one individual whose accomplishments advanced angel investing.

The Angel Capital Association is North America’s professional alliance of angel groups. This fast-growing association brings together 165 angel organizations in the United States and Canada to share best practices, network, and help develop data about the field of angel investing.

Announcing the award at the 2007 ACA Summit in May, Susan Preston, managing director of the CalCEF Clean Energy Fund, said, “Luis is a pioneer in the angel group field, with impact on a national and world stage. He has willingly shared his knowledge about the angel investing process, particularly in valuation, with other angels and angel group leaders through education, writing, and informal mentoring. He has truly advanced the legacy of Hans Severiens.”

The award is named after Hans Severiens, one of the fathers of angel investment organizations. Dr. Severiens founded Band of Angels in 1994 as one of the first professional angel investment groups in the United States. He was also a founder of the Angel Capital Association, a companion organization to ACEF.

Villalobos was one of North America’s most active and successful private equity investors. He made 63 angel investments personally with an average return of 5X. He  developed and led over 100 workshops. His topics of expertise were: valuations, due diligence, term sheets, deal structures, diversification, venture capital, angel investing, early-stage funding, business plans, patents, and intellectual property.

He had been making angel investments for 15 years when a local business council recruited him 10 years ago to lead a pro bono task force to help capital formation in the Orange County, California region. Villalobos contacted Hans Severiens, then leader of the Band of Angels in Menlo Park, CA.

“I must have talked to Hans a dozen times in a week,” said Villalobos. “He was very, very gracious. The Band had been operating for about three and a half years, meeting once a month for dinner where one or two companies made presentations. The staggering thing was that the Band had funded half the companies that had presented.”

Villalobos disbanded the task force, and started TechCoast Angels. He thought, “If you fund at least half the ventures that make presentations you are going to attract the best ventures and the best angels in the region, and make it easy to meet the funding goal. This model is one of these so-called virtuous cycles.”

Villalobos added additional formal processes to the Band of Angels model. But whereas the Band was based in Silicon Valley, considered the heartland of high tech entrepreneurial activity and venture capital, the Orange County business environment where TechCoast Angels began was very different.

Luis once stated, “Local people told me I would be wasting my time and would be lucky to have a handful of angels in five years because in contrast to Silicon Valley, I was told that Orange County had no VC money, no angels, and was all about real estate. But if I had known then what I know now, I would have started the group a lot earlier.”

Today TechCoast Angels is the largest and most active angel groups in the country. Its members provide funding and guidance to more early-stage, high-growth companies in Southern California than any other investment group. TCA members invest in companies in a wide range of industries, including the life sciences, biotech, IT, services, retail, Internet, financial, software, media, consumer products and tech startups. TCA members give companies more than just capital.

They also provide counsel, mentoring and access to an extensive network of potential investors, customers, strategic partners and management talent. TCA has more than 300 members, including its venture capital affiliates, in five networks in Los Angeles, Orange County, San Diego, Westlake/Santa Barbara and the Inland Empire. Since its launch a decade ago, the group has invested $100 million of personal capital in 132 companies which have gone on to attract an additional $1 billion in capital.

“It is an honor to receive the Hans Severiens Award, and I would like to thank ACEF and ACA for this recognition,” Villalobos said on his day of recognition. “I took the idea that Hans used for the Band and added additional formal processes, but ultimately it’s all about the people involved. TechCoast Angels wouldn’t be where we are without the huge numbers of members who put in countless hours to build up various networks, vet our deals, engage in the investment process, invest their capital, and support our ventures post-funding.”

A graduate of MIT and Harvard Business School, “Luis was one of the brightest individuals I’ve ever been around,” said Don Kasle, another TCA member. “But at the same time he was so exceptionally nice and always willing to help.”

Villalobos developed a lung problem that doctors couldn’t diagnose, said wife Ora Zoe. He went into the hospital on Sept. 21 and his condition continued to worsen. “They had no solution for him.”

She said Villalobos was greatly interested in any challenge, for business startups to poker. “His interests were so mixed. He was very dynamic, very brilliant and compassionate.”

Sources: Tech Coast Angels, Angel Capital Association and Orange County Register

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From Tech Coast Angels
“We’ve lost a great friend, business leader & investment pioneer – Luis Villalobos founder of Tech Coast Angels. Truly an inspiration, he built companies and under his leadership & vision, he helped gather the leading business people in SoCal to invest in & foster promising young companies. He leaves a great legacy and will be missed.”
>>Learn More: Tech Coast Angels

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>>Read More: Wall Street Journal Remembering Luis

>>Learn More: Angel Capital Association