When Babak Hafezi was only two years old, his once-affluent family fled to Austria to escape the violent revolution destroying their home in Iran. They were only able to bring a little money, but his parents were smart enough to pack a few valuable items. Entrepreneurs by nature, they used those limited means to open a restaurant.
It was a huge restaurant with a ballroom space, capable of seating five hundred people. Yet, while it began as a success, its initial tide of good fortune soon waned, and the business became a financial drain on the family. “My father didn’t know the Austrian market and didn’t speak German,” Babak explains. “None of his partners knew anything about the restaurant business. Because of all his successes in Iran, he had been confident he could manage it, but he simply didn’t have enough information to succeed.” For the second time in just five years, his family lost everything and was forced to move to Spain, where the cost of living was more manageable.
Despite the financial and cultural hardships they faced, the Hafezis were fast learners and hard workers, which eventually allowed them to achieve a stable lifestyle again. Babak, however, never forgot how wrought with strife his parents’ path to normalcy had been. With his past in mind, he made it his life’s work to create avenues of efficiency for both international and domestic businesses and individuals alike, ensuring that each person he served left with the information they needed to succeed.
Today, Babak is the CEO and founder of HafeziCapital International Consulting and Investing, a company focused on improving businesses from four angles. The first is through internationalization, as inspired directly by his parents’ experience in Austria, Australia, and Spain. An American company, for instance, will come to HafeziCapital wanting to learn how to move into a foreign market, which can easily lead to failure if not done with care. “Every market is different, so it’s important to understand the cultural nuances of market entry,” Babak explains.
The second angle is focused on helping technology companies learn how to package themselves to gain more capital, be it a company in its infancy or a mature company that now needs venture capital or private equity. The last two angles, more focused on consulting, entail helping companies that have problems with structure or foundation reorganize, and helping companies who have stopped growing. By addressing success from these four key vantage points, Babak is committed to engendering growth, organization, and capitalization for each and every client.
Babak was born in Iran to an upper class family shortly before the Iranian Revolution of 1979. “My mother’s family was part of the Thousand Families,” he explains. “Every country has a group of a thousand families that sort of influence the country. My father was a very well respected and influential banker.” Despite the family riches, both parents were committed to their professional lives. His father earned two bachelors degrees, and both parents worked prestigious jobs for the Iranian Central Bank. They also saw themselves as entrepreneurs, always working on side ventures apart from their full-time jobs.
“Education is a strong value in my family, as well as in Iranian culture as a whole. In an Iranian household, if you get an A minus, they don’t congratulate you, but rather ask you why you did not get an A. The bar is always set to perfection,” he notes. “Education was always an integral part of our lives. None of my Iranian friends have less than a masters degree, and many have two. I knew I would never get the approval of my family and Iranian society without an education. If you didn’t have education, you couldn’t marry someone in your own class, and respect was impossible to gain. If you had a degree, elders listened to you. If not, they ignored you. It was just what our community required of us.”
Babak’s time in his birth country was cut short by the onset of the revolution, which he has little memory of. “The situation was so bad in Iran that you essentially didn’t know who your friends were anymore. All you had was your immediate family,” he recalls gravely. “Peoples’ lives were torn apart. Those who didn’t have much would claim your assets, and you had no way to protect yourself, so we lost all our wealth. Most of the thousand families fled the country. If you couldn’t sell your land before the revolution, you lost it, which hardly mattered because everything lost its real value during the revolution.” The Hafezis move to Austria and then to Spain allowed them to manage their cost of living more effectively. What’s more, the culture in Spain was similar to that of Iran, so it was an easy and welcome transition for the family, though Babak continued to attend Die Deutsche Schule, a German school in Madrid.
Babak was seven when the family arrived in Spain, and after five years, his parents decided to move to Australia, hoping to give Babak the opportunity to learn English. They had heard that most Iranians who traveled directly to Australia after the revolution loved their new homes, but Babak and his family had not predicted the tremendous culture shock that ensued, so they quickly left for the United States, which proved to be a better fit for them overall.
The family lived happily in Virginia for several years until 1992, when Babak returned alone to Madrid for boarding school. A few months later, his parents decided to return to Iran to tend to one of their old businesses that the government finally decided to hand back over to them. Before fleeing the country, Babak’s father had been the majority shareholder of the premier private school for women called Marjan, and now that it was his again, he flew to Iran, intending to return to the U.S. within six months but instead remaining indefinitely.
With his parents too far away to support him, Babak returned to the United States from boarding school and moved in with his uncle. When his uncle married, however, Babak found himself cast out. He had no choice but to live out of his car for a few months as he worked four jobs and took full-time night classes.
Babak went to a community college for two years and earned a full-ride scholarship to American University, where he earned both his Bachelors of Arts in international studies and his Masters in international peace and conflict resolution in three years. During his time at American University, he began to DJ as a means to support himself. At first, he stuck with small events, but it was only a matter of time before he was being invited to perform globally. “Clients would invite me to retreats, and they would pay for everything,” Babak smiles. “I was able to work hard in school during the week, then DJ around the world on weekends, making money and having fun.”
After graduation, he took his LSATs in the hopes that he could return to American University to attain his law degree and pursue a career in international law. He was waitlisted, however, and continued to work on improving his scores. While American denied him, he was accepted to New York University and he decided to enroll.
Shortly before Babak’s move to New York City, his parents came to visit him for the second time in twelve years. Sadly, his father, was suffering from a heart condition, which quickly deteriorated during the month they were with him, and he passed away. Babak was devastated, and after going through law school orientation, he realized he was not mentally or emotionally prepared for the combative nature of the program. He had already taken a year off since attaining his masters, so he instead decided to call American University’s business school and explain that he wanted a spot in the class. Though he was long past the deadline for applying, the school looked at his grades and accepted him, and within twenty four hours of making the call, he was enrolled.
“I started at business school part time to see if I’d like it, and I quickly realized it was the best thing that ever happened to me,” Babak confides. “It was so much more team oriented. It taught me to work with people and was perfect for my communication skills, while also making me very independent. Business school forced me to become an extravert and share the social aspects of my life with others. We forget that business transactions are social interactions. Business school is where I belonged, I just didn’t know it.”
While working on his MBA, Babak continued to DJ to support himself. His mother had returned to Iran temporarily to continue supervising the family business. Within a few years, she returned to Washington to be near Babak and lived semi-independently, which served as an additional motivator to work hard. “My mom has nieces and nephews who are still in Iran,” he notes. “I want to bring those children here for her. I want to better my life and those of the people around me. I want to give those kids the same, if not better, opportunities than I have had. ”
During his time in business school, Babak realized he wanted to be an entrepreneur like his father, rather than work for a big organization. When he graduated in 2008, the economy was in such a state that there was little hiring going on anyway, so Babak decided he would create his own job. “Our vision was to take on businesses having trouble in the market, identify their weaknesses, clean them up, and make them more effective in the business world so that they could be sold off in 3 to 5 years,” Babak explains. “We shared that business idea and obtained $25 million in committed capital, with the promise that after we had the company in motion, we would get up to $100 million more.”
With the healthy head-start they were given, Babak and his new business, HafeziCapital International Consulting and Investing, found several companies to begin the due diligence process. The unstable economy, however, led to the sudden recall of all their committed capital. While it had been committed money, it hadn’t yet reached their bank accounts, and Babak had no choice but to let the deal go. “When the economy turns for the worse, there is nothing you can do but play the best hand you are dealt. It’s like catching a falling knife—you’re bound to get hurt. When redemptions happen, there’s nothing you can do,” he notes. “You can’t force them to stick with you. Clients always remember the bad, and given that we were a new firm, we wanted to develop clients for life. Ultimately, people trust us with their money, and we have to always think in the best interests of the client, even when it’s against our own interest. We were able to recover by adapting our strategy, but then we wondered what we should do next?”
While the economy was unstable, the demand for consulting seemed somewhat stable. Babak had accumulated some clients through his MBA program, most of whom were doctors who needed assistance running their practices, and he began consulting for them. He slowly gained prominence throughout the area, and people began coming to him for his counsel on an array of business problems, including strategy, risk mitigation and management, mergers & acquisitions, organizational integration, operations management, marketing, deal development, capital raising, and the process of going international.
Looking back, Babak noted that the only thing he would have changed about the development of HafeziCapital would be the timing. “I could have achieved everything in two years in a good economy, but instead I did it in four years and used a lot of money because I started when the economy was anemic,” he observes. “I wish I had waited so that I might have gotten more bang for my buck when the economy turned itself around. But then again, you never know what the economy will do.”
Despite the hardships the company saw in its early years, Babak kept his head held high, to which he credits the support of his family and peers. “They always told me to give it time,” he affirms. “Their support gave me the belief that I was going down the right path. I surround myself with people who believe in HafeziCapital, themselves, and can complement my weaknesses. HafeziCapital is a multi-faceted puzzle, each piece complementing the other. As a whole, we are stronger for that. Everyone around me strengthens me in one way or another.”
As a leader, Babak hopes to give the same sense of capability to his employees that he feels himself. “I believe leadership is about giving tools to your peers and making sure they have a north star to follow,” Babak explains. “I don’t believe in hovering or micromanaging. If you hire the right person, you don’t need to micromanage them. We’re a small team, so we all need to get our respective jobs done. They need to be confident enough and have the capacity to deliver what we ask of them.” He also notes that it should be a reciprocal relationship, where both the leader and the employee can push each other and talk freely about the next steps. “We create highways for mobility within the company,” he avows. “Everyone wants to succeed and not stay where we are, so we create these highways to become better and allow the freedom to collectively grow. Everyone has the ability to build their own highway; it just has to work with the company’s overall strategy.”
In advising young entrepreneurs entering the business world today, Babak stresses the importance of that very same support system that got him through the rough fledgling months of starting his company. “For anyone to be successful, they need to have a love of their life,” he remarks. For Babak, this entails his intelligent, loyal, and ever-supportive fiancé, but also extends inward to encompass the need to have a passion for one’s work. “There will be times you stop believing in yourself and what you’re doing, so make sure your passion is great enough to carry you through those moments,” he says. “Never follow money. Follow your passion, and money will always come.” He also invites young people to embrace their failures, noting that those darkest times are when the greatest lessons are learned. “Fail big and fail fast. This way, you learn and don’t waist time. Personalities are developed when people are challenged. Always remember to dust yourself off and get back to work. Always remember that success lies within your own hands, and never allow fear to creep in,” he says.
As he commits to finding avenues to efficiency for his clients and highways to success for those around him, Babak’s legacy is one that mirrors the grander narrative of the country that allowed him to do thrive. “I want to be another success story that defines American exceptionalism,” he says. “I came here, and it took me in. America takes individuals from all over the world and gives them hope. This hopefulness and optimism is an American characteristic. Only in America can an eighteen-year-old kid have a technological idea and be funded by angel investors and venture capital to the tune of millions. American exceptionalism is based on hope and opportunity, and this formula is very hard to replicate. ”
And what America has done for him, he does for others. Despite his great success in the United States, he is aware of his roots and of those who helped him. “I now work with Iranian activists to help tortured individuals out of Iran,” he explains. “These teenagers are physically and psychologically abused by the Iranian regime and stuck in prison, so we work with international groups to eventually obtain refugee status for them and allow them to live in a safe country and pursue their respective dreams.” He views his success as his own avenue, enabling him the power to help those less fortunate than him, and although his time in Iran was short, he feels a strong moral obligation to help bring it back to peace and prosperity. “My family and friends pushed me toward success when I was down,” Babak affirms. “I hope I can do that for my peers, and for my country, in return.”
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