Consider Bill Gross.

As the creative entrepreneurial mind behind Pasadena incubator Idealab, there was a time in the late 1990s and early 2000s when he was the king of L.A. tech, spinning out highly valued Web companies such as eToys, Overture Services and CitySearch.

So well received on the stock market were the businesses coming out of Idealab, businesses that Gross owned stock in, he made his debut on the list of Wealthiest Angelenos in 2000 at No. 9, boasting an estimated net worth of $1.6 billion.

A year later, after the dot-com bubble burst, Gross was gone from the rankings. Idealab has survived and thrived, but Gross has not returned to the wealthiest list since.

Such is the boom-and-bust nature of L.A.’s technology sector.

“I used to think the business idea mattered more, but now I think the timing matters more,” Gross said.

For instance, Idealab’s online toy-selling startup eToys IPO’d in 1999 with a $2 billion market valuation, only to be bankrupt by March 2001 due to insufficient sales. Today, online toy sales are a mainstay of retail, but back then, the formula didn’t quite work.

The speculative nature of innovation is a difficult thing to master. Over the last 25 years, wealth in the L.A. tech sector has swelled and swooned, not yet giving it the steady wealth-generating power, for example, of real estate or entertainment. Thus, the history of L.A. tech wealth has been up and down, with success based largely on timing and dogged paddling to catch the wave at just the right moment.

The origin of L.A.’s tech sector boom is seeded in the early 1990s, when despite 30 years of buzzing activity in Silicon Valley, computer innovation in Los Angeles remained small, quiet and out of the public mind.

“Back in the ’90s, it was largely aerospace. There was no Internet, and software was really being built in Silicon Valley and Seattle,” recalled Sky Dayton, founder and past chief executive of EarthLink, an Internet service provider founded in 1994. “I had never used the words ‘venture’ and ‘capitalist’ in the same sentence.”

The year EarthLink was founded, however, that began to change; 1994 was the year Netscape’s browser launched and opened up the Internet to the masses.

“You could see it, you could see this gigantic wave coming, but people in L.A. had no idea.” said Jim McDermott, co-founder and former chief executive of Santa Monica’s Stamps.com. “It was sort of laboring through anonymity. The first couple years we were just cranking away.”

When Netscape went public in 1995 and hit a market cap of $2.9 billion, what was an industry reserved for Silicon Valley became a mainstream gold rush.

“In ’97 to ’98, things just accelerated like crazy,” said McDermott, now managing partner of Santa Monica investor U.S. Renewables. By 1999, he said, the gloves came off.

Fortunes were being made in the L.A. tech sector.

In January 1999, GeoCities, a Beverly Hills directory of build-your-own websites, was sold to Yahoo for $3.6 billion and its co-founder David Bohnett took home a cool $300 million. EToys went public in May 1999 at $20 a share and closed its first day of trading at $76. NetZero’s stock rose 82 percent on its first day of trading, while paid search company Overture went from $15 to $108 a share within 12 months.

One of the highest fliers of the time was heavily leveraged Global Crossing, a telecom company formed in part through a buyout of an underperforming undersea fiber-optic cable operation from AT&T in 1996.

Global Crossing gambled that the demand for Internet infrastructure would be exponential. The public agreed and wildly valued the company on the stock market at an astounding $54.5 billion in 1999.

Gary Winnick, its founder, debuted on the list of Wealthiest Angelenos at No. 1 that year with an estimated net worth of $6.2 billion, a full $1.5 billion ahead of No. 2, oil baron Marvin Davis.

To follow Winnick’s trajectory after that, though, is to trace the decline of the tech industry here and around the globe. A year later, he was ranked No. 3 with a net worth estimated at $3.8 billion, slipping in the rankings each successive year until 2004, his last year on the list, when he was ranked 47th with a net worth of around $570 million.

He was by no means alone.

When the public realized it needed far less Internet bandwidth than Global Crossing was offering or far fewer online toy sales than eToys provided, the value they saw in those companies evaporated. And so, too, did the wealth of their founders.

Next wave

The dot-com crash turned the L.A. tech sector into a ghost town.

“Everyone has the same story for 2001 to 2004: it was a frickin’ grind,” said McDermott. “The people who really understood the power (of the Internet) knew nothing had changed, except people didn’t want to invest in it.”

Eventually, the sun started to break through the gloom in 2003, when Idealab sold paid search company Overture to Yahoo for $1.6 billion.

Gross, who had gotten the timing right with Overture, reflected that the company was a success because it fixed a clear and present problem.

When Overture was founded in 1998, “so many companies were looking for ways to buy cost-effective traffic and on the flip side so many people were complaining about the spam in search engine results,” he said. “You really need to look at: Are all the elements in place to make your particular idea succeed?”

The timing was right for paid search.

Several other companies found the timing right in the mid-2000s. In 2005, L.A. e-retailer Shopzilla was sold to E.W. Scripps for $525 million, News Corp. bought Myspace for $580 million and Electronic Arts bought mobile gaming studio Jamdat for $680 million.

But it was the introduction of the iPhone in 2007 that really sparked a wave of innovation that has fueled the incredible rise of tech wealth in Los Angeles.

No mobile startup has been more successful, at least in terms of piquing investor interest, than disappearing-image app maker Snapchat. The Venice company has raised about $700 million in venture capital for a $15 billion valuation, making billionaires of co-founders Evan Spiegel and Bobby Murphy.

Those two are the only tech executives on this year’s list of Wealthiest Angelenos whose fortunes have been built wholly in Los Angeles.

That might change.

Several entrepreneurs, who cut their teeth in the last two decades, are back for more.

Brian Lee, who co-founded LegalZoom of Glendale in 2001 and sold a controlling stake to European private equity firm Permira for more than $200 million last year, is also a founder of ShoeDazzle (now part of El Segundo online fashion site JustFab) and Santa Monica consumer goods online retailer Honest Co. Both JustFab and Honest Co. carry a valuation of around $1 billion.

And despite some flameouts, Gross said the companies that came out of Idealab have created more than 10,000 jobs as well as a great deal of wealth.

“A lot of those people became millionaires,” he said. “And a lot of those people, even if they didn’t become millionaires, they saw the startup cycle. A lot of them are considering a startup as a possibility.”