Geraci Partners, Unmasked | Anthony Geraci & Nema Daghbandan

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In this unscripted episode, Kevin interviewed fellow Geraci partners Anthony Geraci, Esq., and Nema Daghbandan, Esq. Kevin, Nema, and Anthony shared war stories, personal histories, and perspectives on various aspects of the private lending industry.

Named to the 2021 Southern California Super Lawyers® list, a designation given to only 5% of attorneys, Anthony Geraci, Esq., is the CEO and a partner at Geraci, in charge of firm strategy and development of Geraci’s team and culture. He is an avid public speaker and strives to provide peace of mind to his employees as well as to all Geraci clients nationwide.

Nema Daghbandan is a Partner with Geraci LLP. His practice encompasses all facets of real estate transactions, primarily representing lenders, brokers, and loan servicers. His practice revolves around the preparation of documents and providing compliance advice to mortgage professionals related to nationwide commercial, residential, construction, and multi-family loan transactions.

Episode Transcript

Kevin Kim:
Welcome everyone to a live edition of the podcast. I’m here today with my partners. It’s still coronavirus time so we’re wearing our masks, but during this interview, we’re taking them off. So, gentlemen, masks off.

Kevin Kim:
We’ve interviewed a lot of great people until now and I thought one of the best things we should do is interview my partners. So, here we are today, Anthony Geraci, of Geraci fame, and Nema. We all know Nema.

Nema Daghbandan:
Of Nema fame.

Kevin Kim:
Of Nema fame. So, we’re going to have some fun today. We actually went a little bit different this route. We went out to some of our friends and clients in the industry, some of our people in the office and asked a bunch of questions. Got a bunch of questions from people who want to know more about you guys, your thoughts about the industry, thoughts about COVID, thoughts about yourselves. They want to know more about you.

Nema Daghbandan:
Absolutely.

Kevin Kim:
We’re going to ask those questions and hopefully have fun with it today. So, let’s get started. Try to keep it a little bit easy first. This question is from Huy. Huy Do over at PrideCo, our boy Huy.

Anthony Geraci:
I don’t like where this is going. Can I leave? Can I have my To Catch a Predator moment and be like, “I’m out of this thing”?

Kevin Kim:
I got to tell you, Huy asks some of the best questions. So, the first question from Huy Do is, you have contributed so much to the private lending industry. What has the industry given to you personally? To you personally. Yeah, Huy’s deep like that. Thank you, Huy.

Anthony Geraci:
You want me to start?

Nema Daghbandan:
You should start that one.

Anthony Geraci:
What has private lending given to me?

Kevin Kim:
That was good.

Anthony Geraci:
I’ve never had a career outside of private lending. I’ve done this my entire career, so it has given me everything, if you will. It’s given me a lot and I’m asked a separate question sometimes, is how did I get into private lending and I think that’s pretty well known. I started a small firm, left, and then started Geraci. But maybe the thought process, what attracted me to private lending versus some other area of law is private lending’s just, I guess, intellectually difficult, which that makes it fun for me, if that makes any sense.

Kevin Kim:
That’s true.

Anthony Geraci:
There’s so many state and then federal laws that overlay and sometimes overlap, but have floors and ceilings, and just navigating that space on behalf of our clients, for me, has just been… Maybe the ultra-nerd comes out, but exciting. It’s been a lot of fun. So, that’s what attracted it to me and then what it’s given me is the ability to serve all of you guys in the private lending space. I hope I’ve contributed as well, but it’s given me everything I have. So, deeply indebted to it.

Nema Daghbandan:
Yeah, I mean, it’s interesting, right? I think that the space itself really ties in with who we are. What I mean by that, it’s entrepreneurial. Right? We represent a small contingency of non-private lenders, your banks, and those sorts of things. And it’s given me a real thankfulness that we represent as many private lenders as we do, just because they want to grow something big, right? When we sit around and we talk about what we want and our hopes and dreams and where we want to go, they do the same thing with us.

Nema Daghbandan:
And so, when you’re counseling someone, you get excited, right? They’re like, “I want to build this rocket ship. I’m going to crush my competitors.” You’re like, “I’m with you. Let’s do this together.” And it’s the same conversations we have here and you don’t feel like there’s anything blocking them. The world is their oyster and if something doesn’t happen, it’s because it didn’t happen on their watch. It’s the same way we think here, which is, “No, if it’s impossible, it’s because you haven’t figured out a way to do it,” right? And I love that about our industry.

Kevin Kim:
There’s not a lot of, I guess, roadblocks, right?

Anthony Geraci:
Yeah.

Kevin Kim:
We’re working with a lot of the CEOs and decision-makers. We’re not working with a ton of contract administrators. We’re working with the guys who make the decisions. Yeah, it’s been really cool to see. We’ve been around long enough to see these guys. A lot of our great friends in the industry start from two-man operation to now 50, 100 employees, lending nationally, managing God knows how many millions, they’ve kept millions of dollars under their belt.

Kevin Kim:
And that’s interesting to think. That goes back to the firm though, right? So, I want to ask you guys, so Jadon, our friend Jadon at Noble Capital, and Private Lender Network-

Anthony Geraci:
Friend.

Kevin Kim:
Friend.

Anthony Geraci:
We’ll see where this goes.

Kevin Kim:
Asked us a good follow up question to this, and I like this question is-

Anthony Geraci:
Oh, boy.

Kevin Kim:
So, why did you choose to focus this law firm to this industry? When I first joined, we were doing a little bit of everything, right?

Anthony Geraci:
A little loosey-goosey back then.

Kevin Kim:
Loosey-goosey back then, right? When we were in our sweatshop of horrors. When you were the only one that had an office. But we moved here, and we doubled down in this space, right? [inaudible 00:05:02] what? Why? Why did we choose to do that?

Anthony Geraci:
Why do our clients come into the space in the first place? I think if you trace it back well before even my time, and even bring it in now, is private lending was very fractionalized. You saw it as very much a state level. If I had to rewind the clock pre-2008, which is the way I kind of look at things before the great recession, it was very much a state level. Your highest authority back then was really the state. All right, maybe some Truth-in-Lending laws and some other federal laws you had to comply with.

Anthony Geraci:
But after 2008, with the SAFE Act, and a lot of different things. Regardless of whether it was consumer lending, you saw very much this national presence now, and that was one of the reasons why I founded AAPL, was this now national spotlight within our industry, which honestly, if you didn’t know somebody in it, you probably never heard about it before. It was a great niche secret of people who couldn’t qualify with banks or needed a special deal. “Hey, I’ve got this great deal. I need to close in seven days.” It was very much word of mouth.

Anthony Geraci:
A lot of credit, I think, to the crowd funders and stuff like that, that brought a lot of attention to this space. But I thought that we could contribute, and why we doubled down on the space was there was a lot of fractionalization even within. And who better than, I think, the people who’ve served the industry to how can we serve you better? How can we bring in additional resources? Who can we connect you with? And how can we deepen relationships with our clients? Because at the end of the day, and selfishly, it was more of we want to exist past lawyers.

Anthony Geraci:
I know we’ve talked about this, the three of us, as far as what occurs when lawyers are just doing lawyer jobs, and how do we get outsourced for that? But I don’t think you can outsource relationships, and you can’t outsource a person who can connect you to your next business deal, and that’s what I wanted to be a part of. I’ll let you-

Nema Daghbandan:
I think too, is we had… I remember, I feel like 2015 or thereabouts was when that decision was really made, maybe in 2014, where we were trying to soul search about who are we? And why do we exist really? That’s when we started creating values and all those sorts of things, and trying to really figure out organizationally what we were going to represent and what we were not. We were having a soul-searching moment of are we a real estate firm? Are we a lending firm? What do we do? What do we say no to in that process?

Nema Daghbandan:
There was also kind of I think a clarifying moment. There’s plenty of books, Good to Grade, and all these things that kind of say the same thing too, which is be the best at whatever it is. In order for you to do be the best at whatever this is going to be, you have to say no to lots of things. So, I remember before that time, we were representing a student lender, right?

Kevin Kim:
I remember them.

Nema Daghbandan:
And we were trying to figure out. We were just like, “Yeah, it’s a lending concept.” We were trying to be this master of all. You know what happens? We were pissing off our clients. “You’re out of your depth. I should have gone to an expert.” Just as much as you go to a specialist when you want a brain surgeon. You don’t go to your pediatrician and be like, “Hey, I got an issue up here,” right?

Nema Daghbandan:
We’re the same way, and so we’re like, “You know what? Let’s be the absolute best. Let’s be the dominant force in this so that no one can touch us.” I think that was really the soul-searching moment, and thank God we did. That really set the wheels in motion for our true growth.

Kevin Kim:
When do you guys think that kind of clicked in the market? We had worked very hard from ’14, ’15, into ’16, ’17, all these past years we’ve been working very hard to build not only just the law firm but the brand as a whole. But when do you think it clicked in the marketplace that Geraci really knows what they’re doing, they’re representative of the industry? I like to think we’re an industry leader. When do you think that happened?

Nema Daghbandan:
It was AAPL, the very first… No, it was. I can pinpoint it for you. It was AAPL, the American Association of Private Lenders, their national conference. The very first time you and I did a shake and bake on stage. 2016?

Kevin Kim:
When I started flailing my arms and yelling at everybody?

Nema Daghbandan:
Yeah. We did shake and bake. Shake and bake is I’m on the finance side, Kevin’s on the corporate and securities side, and we got up there, and we just started talking about the marketplace. That was the first time we just started-

Kevin Kim:
Oh, yeah. That was a while ago.

Nema Daghbandan:
Rather than talking about… Because usually when you go up on stage, it’s what do you got to sell? You want to buy a PPM, you want to buy some loan docs, and that’s what everyone’s up there [inaudible 00:09:28]. We said, “No, no, no, no. We’re going to talk about how to build a lending business. We’re going to talk about counseling our clients and how you actually build and scale this thing, and what do you need to know to do it.”

Nema Daghbandan:
I remember I feel like, after that, the momentum was behind us because people kept coming up because “They know what they’re talking about. These guys really know what they’re doing.” And it really started this concept of “They’re not just this law firm that provides legal services. They understand the business model.”

Nema Daghbandan:
To your point of relationships, it changed the concept of lawyers to what else do you need, right? We know the software side. We understood all the components, so when we were up there, I think our conversation… And we were worried about it at first. We were like, “Is anyone going to come back to us to our law firm after this?”

Nema Daghbandan:
Because we weren’t talking about the law firm at all. It had nothing to do with the law firm. It had everything to do with, here are what successful businesses that do what you do do. Here’s how they build relationships. We talked about building teams, about building your vendor base, about building your partnerships and your alliances. It was very much how to build the business, and had nothing to do with what legal services you needed along the way.

Kevin Kim:
We started discussing the blueprint of a successful lending business.

Nema Daghbandan:
Right.

Kevin Kim:
Right, right, right, right.

Nema Daghbandan:
Right. And I remember from that point forward, I felt very confident that people understood that our depth was much beyond legal services.

Kevin Kim:
How about you?

Anthony Geraci:
I think that’s a great time as well. I think part of it also, that stuff… right around the time I think where we were really building the brand, and if you guys probably recall, it was actually two months before that, we had our first conference for Geraci Media. It was at Innovate in 2016. And that was just… I love how random ideas come together, and it was really great.

Anthony Geraci:
Obviously, you guys were on the stage there, but we had 160 people, and that doesn’t sound like a lot for… That was our very first conference and a lot of people… I think it showed a lot of trust in us as well. They had no idea what to expect from us especially, but 160 people thought, “Well, they do good work, and I believe they’re going to pull it off.” And of course, we did, and we’ve gone on to bigger conferences since. But I think those two together with our own conference [crosstalk 00:11:42].

Nema Daghbandan:
That was the other, I think, tipping point for us as well is it demonstrated that people were interested in what we had to say.

Anthony Geraci:
We showed we weren’t just a new law firm. We really wanted to be their partners in a lot of stuff.

Nema Daghbandan:
Right.

Kevin Kim:
So, looking forward now, because we have a lot of insight, and just by matter of representing so many lenders, we have a lot of insight into how this industry functions or doesn’t function. What are its strengths and what are its weaknesses? A lot of the questions we’ve been getting have to go to not just with respect to COVID, but also just the future of the industry and where you guys see it headed, right? And I think a lot of folks ask us that.

Kevin Kim:
Jan over at Arixa asked us that question as well. So, where do you see this industry going? Because in 2020, right now, we’re kind of in a crisis stage lite, if you will. It’s not like it’s ’08 again, but it’s some tough times. It’s proven that some new solutions, some of the institutional players came, had a little bit of trouble. Some other models we tried out may not work so well. So, where do you think we’re going to be in a couple of years from now?

Kevin Kim:
Let’s talk about five years. Our industry. Do you think we’re going to be like the conventional markets out there, or are we going to be just pure conduit correspondent only? That’s pretty much what the conventional market is now, right? Or is it going to be something else? Is it going to be something unique? Or is it going to be something fractured like it is today?

Nema Daghbandan:
You know what’s interesting is I feel like I had a great answer to this question in January.

Kevin Kim:
Me too.

Anthony Geraci:
Me too. No, I remember-

Nema Daghbandan:
I felt like I know exactly where this train’s headed.

Anthony Geraci:
Yeah, yeah, yeah, yeah. I was interviewing Steve Palmer at Anchor at Innovate, and I was asking him, and we were talking about it, and it seemed really pretty clear.

Nema Daghbandan:
Standardization, right?

Anthony Geraci:
Yeah.

Nema Daghbandan:
This is going to become a real product, real investors, right? Everyone was going to understand it. We were going to be a commodity like everyone else.

Kevin Kim:
Right.

Nema Daghbandan:
Right? You’re going to be able to trade this stuff on the secondary market all day long because we’re going to have standardization in every single aspect of it. This fractionalized marketplace was going to start going away, right? That was January.

Kevin Kim:
It’s July now.

Nema Daghbandan:
It’s July. I don’t know. It depends on how… Put it this way. I think the ultimate question is when capital markets reenters, and what role they play will determine the direction of our industry because we’re at a weird juncture right now. One of two things is going to happen. Wall Street’s going to come back in and they’re going to keep playing again and we’ll go right back down the road of standardization or they don’t, right?

Nema Daghbandan:
If they don’t, then it goes back to the Wild Wild West of everybody trying to figure out how do I basically make a simple business model and go back to that entrepreneurial spirit? But one of those two roads will emerge. I think that’s where the industry has to head.

Kevin Kim:
Any thoughts on that?

Anthony Geraci:
A lot of thoughts. I see a combination. On my LinkedIn, I think probably about three months ago right when this was coming out. I said it was 2010. And for about 30 minutes, it was 2010. You saw Wall Street just exit, and that means, “Hey, we’re back, double-digit returns, four points. Whatever you could name.” And then catching up with clients certain Wall Street players or I should say certain players backed by Wall Street are coming back in the fold.

Anthony Geraci:
And so, the 12% and four points were back to eight-and-a-half and one. So, more expensive than January money, but definitely a lot less in 2010 money. And I think there’s got to be a world where both of those worlds coexist. I just kind of take a look at how crowdfunding entered the market. You saw them enter the market. You heard about them 2010-ish, but I don’t think it was really until 2015 on, that you really saw crowdfunders really enter.

Anthony Geraci:
And I don’t mean to highlight them, but more of show how they operate, and these were definitely people backed by VCs and/or credit lines and/or both. Some of them are back, some of them are not back, but I think the key between that is their underwriting has tightened. I should say they’re unwilling to risk like they once were in 2010 to 2015, and if anything, they’ve become more conventional.

Anthony Geraci:
But I have to believe there’s a world that exists where I’ve got a good deal, I’m going to exit, and so I see both worlds converging. How that plays out, I don’t know. I wish I had a better crystal ball than I do now, but I think both of those worlds will coexist. Whether that’s going to be different product types or there’ll just be a certain credit segment. I don’t know exactly how that will end, but I do know they’ll coexist.

Kevin Kim:
So, I guess this kind of leads to another question as a lot of people have asked us all this in private conversations, on webinars. Not necessarily crystal ball time, but we’re facing what can essentially be defined as at least an economic downturn, right? Unemployment is rampant, right? Interest rates are at zero. It’s a pretty rough time for the economy, right?

Kevin Kim:
And Anthony, you founded the firm during the last recession, right? So, the question, this is from John Beacham over at Toorak Capital Partners. What piece of advice from your history in the last downturn would you give others in this field when trying to navigate this situation? Nema and I, we came post-recession, right? And we’re recession babies [inaudible 00:17:24]. We graduated law school during the recession. So, we weren’t working in this industry during the recession.

Anthony Geraci:
Yeah, so I can tell you what worked in the last recession, hindsight being 2020 and probably what would work now is as funny as it sounds, it’s not the time to be creative. What I mean by that it’s not the time to push 100% ARV into the ground with rehabs and stuff like that.

Anthony Geraci:
Recognizing no matter what it is, what is the end-product? The end-product is that new home buyer buying a house, your rehab, or just fixed. Great, but if there’s no income, there’s no buyer. I think we can all see as it stands right now, I think the economy is artificially propped up by the government. And as of today, that money runs out as I’m told, or was that extended?

Anthony Geraci:
So, where does that go? I think watch the next three months, but I can tell you now’s not the time to go 95% ARV. Now’s the time probably to go back to basics, if you will, 75% purchase price of property and let somebody else rehab it. That’s not to say you can’t get creative on property types, and I think that’s what really shined back in 2008.

Anthony Geraci:
You could see that… This will be funny, but rehab and fix-and-flip was a new product back in 2008. You ask people who are doing it, but that became very popular as Dodd-Frank was just coming out making the entire owner-occupied segment uncertain. No one wanted to touch it. Oh, look, fix-and-flip. Well, they’re not going to occupy the property, but good returns, low risk of litigation, let’s do it. And of course, now it’s a staple of today’s economy. So, I guess the question comes down to what’s today’s fix-and-flip?

Kevin Kim:
Right. Some posit rentals. I don’t agree with that, right? I think there’s too much reliance on the bond market. You need to securitize that product. It’s too low yield, right? Someone said to me, “Oh, well, it’s commercial credit, right? That market’s still doing real hot.” I’m like, well, a lot of those borrowers are starting to shut down, file for bankruptcy. Even the big box retailers are now essentially going under. J.Crew filed for bankruptcy. I can’t think of any other brands, but a lot of big brands who were borrowing tons and tons of money are folding.

Kevin Kim:
So, what do you guys see? Is there something new? I’ve always thought it’s been… A lot of our clients have modeled their business, whether it’s resi or not, they kind of looked like a commercial real estate lender when you look at the way it’s structured, right? And they look at transactions. Whether it’s resi or it’s commercial, they look at it almost like a commercial real estate transaction and not as a resi transaction.

Kevin Kim:
I always thought that mixing your portfolio and your capabilities into commercial would be a smart move, but commercial seems to be struggling as well. And so, what do you think? Is there anything creative you guys have seen lately or ideas that you guys have been throwing around or hearing about?

Nema Daghbandan:
I think the big one right now is this industry has always thrived on dislocation and that didn’t change, right? Where is there an inefficiency, market or otherwise, that I can capitalize on because the story makes sense? All the things that standard underwriting said. This doesn’t make sense for a bank because it’s too out of the box for them, but I understand how I’m going to get out of this thing. There’s a clear exit strategy in place and I can manage that risk.

Nema Daghbandan:
I don’t think that changes at all, right? I think if anything, those opportunities seem to crop up more, so while you have a freeze in the CLO and the CR… You have a lot of problems in the capital markets side on that side of it, what it’s going to mean is loan maturity will still happen, right? These guys are going to need loans. They are creditworthy borrowers. They will get capital again at some point. Those markets will reopen.

Nema Daghbandan:
So, perfect dislocation, right? Credit… And I think that’s the right trend to echo what you said is creditworthy borrowers, right? You’re going to reduce your credit risk, right? And those stories are still going to pencil out and you’re still going to find your way through it. That marketplace is going to come back at some point. So, you have to figure out is where does that… Is it one year, is it six months? Whatever.

Nema Daghbandan:
Right? So, can you withstand the storm that that’s going to be? But the people that were creditworthy prior to this are still going to be creditworthy after this, right? You have a economic financial dislocation is all they’re suffering through right now.

Anthony Geraci:
[inaudible 00:21:36] on that so you ask it and you guys are much closer to clients than I am. I get on higher-level conversations, but that’s about it. But I’m going to go out on a limb, and my prediction will be consumer lending comes back because I think you have that predictability. They either have a job or don’t, so you can predict whether they can… And it’s a pain in the butt. Yeah, you have to do ability to repay and all that other stuff, comply with Truth-in-Lending Act, but it’s a more certain loan, I think, funny enough than rehab and fix-and-flips is.

Anthony Geraci:
Because the whole fix-and-flip market… Of course, there’s people who focus on the higher end. Most of those people though are focused on the new home buyer, and when you have unemployment, which I think we all recognize is in the double digits at a minimum, so call it 10%. But you’ve seen reports at 12%. It could be closer to 20%. Now, almost your ability to repay becomes your shield. You know that this person has a job again, you know they can pay your loan.

Nema Daghbandan:
It goes back to credit and the ability to obtain [crosstalk 00:22:33]-

Kevin Kim:
And that’s interesting because we have had discussions about consumer bridges becoming a new popular product that’s becoming more and more in demand lately. People are leaving… I got a call yesterday, someone told me everyone is leaving San Francisco and they’re going to the neighboring cities and they need bridge loans to get to the next home. You’ve got a lot of that happening. Home sales seem to be continuing, so I think that’s-

Nema Daghbandan:
And that’s an important trend too. I don’t think this is earth-shattering. I think you guys already see it and I think our clients see this too, but you asked about comparison back in the last recession. The last recession because lending was so fractionalized, if you were a California lender, you lent in California. Maybe Nevada or something very close. I think today’s private lender is going to lend in any state that they can find a deal in and have the confidence of someone like ourselves, not to promote us, but ourselves that we have loan docs in all 50 states, but also, their network’s bigger because they’re going to harness technology more and more because things like Zoom and all the things we’re harnessing today.

Nema Daghbandan:
It’s going to be adopted, and so, they may not be… I’m a California citizen, I’m going to lend in California only. You’re probably going to see California people lend in Kansas, Ohio, wherever that opportunity is.

Kevin Kim:
Right. I think the majority of folks, the folks that lend only in one state are now becoming minorities.

Nema Daghbandan:
Correct.

Kevin Kim:
I’ve just talked to one person in the past three months that lends only in California. I think everyone else is at multiple states.

Nema Daghbandan:
And they’re smart too. I mean, the interesting thing is the people that started lending the fastest were very much the people who said, “Okay. Well, great, I can’t lend in New York or the Northeast right now, right? But Kansas is doing great. You start immediately to divert capital, right? The nimbleness of this industry is very interesting to watch.

Kevin Kim:
That’s true. Things evolve very quickly. Conference to conference you hear about new models and new ideas from the same people. I’ll shift gears a little bit because we got some good questions about you guys, all right? We talked a lot of shop right now about where the industry is going, but I’m sure the purpose of this podcast today was we wanted to get to know you guys a little bit more beyond just the work, right? And the representation of the industry.

Kevin Kim:
So, one good question to start us off comes from our friend Huy, again. Cheers to you, Huy. What are some principles you’ve learned throughout the years of working together that make a great business partnership, right? A lot of our clients have partners. They get into a lot of struggles with new partners. We’ve been partners for some time now, right? But we’re always working on our partnership, right? What do you guys think?

Nema Daghbandan:
This one’s easy for me. I hated Anthony for many, many years.

Anthony Geraci:
And he did, that sounds past tense.

Nema Daghbandan:
And I still kind of hate you on various things, but man, I thought-

Kevin Kim:
So, hate your partners, people.

Anthony Geraci:
As you nod by the way when he says that. I saw that. Don’t think I didn’t.

Nema Daghbandan:
Kevin and I hated each other… Maybe that’s the root of a good partnership.

Anthony Geraci:
For you. For you, baby.

Nema Daghbandan:
It’s just a lot of resentment and hate makes for great partnerships.

Anthony Geraci:
That’s awesome.

Nema Daghbandan:
And I had an epiphany. So, we’re all a part of Entrepreneurs’ Organization, and for me, that very much helped me evolve my views on partnerships, on how to operate a business. The epiphany for me was I was constantly frustrated with what I thought were injustices, which I never communicated.

Nema Daghbandan:
So, I was harboring all this ill will and resentment or whatever, and I think [inaudible 00:26:09] is I thought we were the same person serving a similar function. And so, I think it really challenged me because I thought, “I wouldn’t do it this way,” or, “Why are you treading me on the issue?” And so, there was a lot of conflict, but the biggest challenge was I was never communicating any of this conflict. And really it just kind of hit me one day of, “Man, I bet this idiot has no idea what I’m pissed about,” right?

Anthony Geraci:
True.

Nema Daghbandan:
I’m holding all these emotions and I’m so upset, and I’ve never communicated to him, and I’ve never given him the opportunity to even think what’s going on in my head. And if I did, and if he tells me to go pound sand after I tell him these things, well, then I know where I should go, right? If he’s not willing to hear me out or if he doesn’t actually see things the way I do. The way I think he thinks, then I know that I should leave this firm and I should go my own way, right?

Nema Daghbandan:
I remember coming to your office and I think I literally was like, “I have a lot of things to say to you. I need you to sit down.” And I just kind of unloaded on you for a little bit. You gave me that fucking face. You gave me the smirky ass Anthony face, and you just sat there and go, “All right, okay. I don’t feel that way. It’s not what I’m thinking and I’m sorry that I made you feel this way, but that’s not where I’m at.”

Nema Daghbandan:
It really just resolved to me was from that point forward that rather than taking… And this is no different than a marriage, right? Rather than taking those little frustrations that build up and those resentments that build up over time of communicating them early on and figuring out whether we actually… Because most of the time when I realize especially with the two of us, in particular, is that helped me understand our roles a lot more…

Nema Daghbandan:
Because I would say something that I was frustrated with, and in reality, I’d be like, “I don’t care about that thing. If you’re frustrated about it, then go do whatever you want. I don’t have a dog in that fight, go fix it. That’s not my problem, right?” And I really started to understand that we had two very different roles within this organization.

Nema Daghbandan:
Same thing with you. You and I kind of figured out our own role and the more we figured out what we were good at and what we sucked at and what we didn’t want to do or whatever, the more that we realized that we would compartmentalize and very much trust each other in this world. That forged the bond of like, “Hey…”

Nema Daghbandan:
And it still happens, right? There will be still times when we get frustrated. We get in each other’s faces about stuff, and more often than not, it’s based on failure to communicate early on in the process, right? And we quickly agree on who’s lane is that? Who’s going to run that decision? Once we’ve determined that that person is going to run that decision, the others step back quickly and say, “Cool, which one of us is the leader? Which one of us is the follower in this particular decision?”

Kevin Kim:
Right, right, right, right, right. It reminds me of the conversation I had with Chris Ragland over at Noble about superpowers, right? He was like, “These are the things that I’m very, very good at and these are the things that I’m very, very bad at or I don’t care about,” right? But it so happens that those are the things that Rodney is really good at or Jadon’s really good at.

Kevin Kim:
And so, they created a great team of their own by doing something similar and you see their dynamic, they’ve got a great team over there. And for me, it was a struggle figuring out what is that for me, right? It’s always like, I’m very passionate about a lot of things. I don’t care about some things, and there are things that I get really amped up about. But trying to figure out what is that particular thing that I really want to drive home.

Kevin Kim:
It’s also hard for a lot of people to admit. We have a lot of clients out there who they’re fantastic originators, and when it comes to time to talk about a fund, they have trouble acknowledging, “I’m not the best at raising money.”

Nema Daghbandan:
Yes. Yes. The ego has to… And I will give credit… I will not give you any more compliments during this [inaudible 00:29:50]. Anthony’s ability to put down his ego in areas… And I think it’s very challenging. We’ve communicated this before because, to be fair, I had not practiced law before we met, so I was an idiot. And so, you had to literally coach and mentor me and teach me everything there is to know about this area of law, and also to then have the same person tell you, “That’s not your decision, pal,” and to switch that dynamic from mentor and boss to partner, is exceedingly challenging.

Nema Daghbandan:
I think that’s also really helped is you’ve really figured out your own soul-searching way to let go of those grips, and that’s not an easy task to do because I think more often than not, some people in your position will say I got us here. I don’t need you to get where I’m going.

Kevin Kim:
Right.

Nema Daghbandan:
Right? And the fact that you do step back and say, “No, I don’t need to run that decision.” Even though you may feel strongly about the direction we’re about to take, the ability to let go of that decision and give someone else the control of it is an extremely admirable quality that you possess.

Anthony Geraci:
And as a self-admitted control freak, it’s difficult.

Kevin Kim:
Well, we’re all control freaks in a lot of respects, right?

Nema Daghbandan:
Yeah.

Kevin Kim:
That’s the challenge is letting go of that, right? So, a follow-up question to you, what clicked in your mind? What made you realize “There are things that I have to take control of and there are things that I just…” Is it you don’t care about it, or is it like I need them to help me get there? What decision in your mind made you realize “I got to let go of a lot of the ego about this kind of stuff,” if you will?

Nema Daghbandan:
That’s a loaded question, and there’s a lot of layers within that too. So, first, I think it’s important… I wasn’t going to go back to it, but I think it’s important. You ask what makes a good partnership, and the foundation of everything, to me, is trust. We are going to screw up because we are human beings, but I trust-

Anthony Geraci:
I’ve never screwed up.

Nema Daghbandan:
Never.

Kevin Kim:
Good. He’s perfect, people.

Nema Daghbandan:
He’s perfect.

Kevin Kim:
He’s perfect.

Nema Daghbandan:
But I trust that you guys have… Not even for me because it’s not individualistic. You have the heart of the firm or you have the goodness of the firm at your heart. That’s not feeding Anthony’s ego, that’s not feeding Anthony at all. That’s what’s best for the firm, not necessarily just for Anthony, and you guys demonstrated that time and again with me. I think that’s important because I don’t…

Nema Daghbandan:
The first question I should not have to ask is, “Oh, shit, do I need to go back and look at things they’re doing? Do I need to worry about where they’re going?” And that’s never been a worry for me. The second part is confidence. Part of it is back to the mentor-trainee. I try not to, although part of, I think is throwing you into the fire, which is a little bit true. You’re thrown to the fire, but from my perspective, I’m throwing you a small part of the fire. The outside of the fire. I can pull you back out if you’re too deep in there, and then I’ll let you go longer.

Nema Daghbandan:
And so, for me, it’s like the rope. First, you’re very tight and I have the control, and then as you demonstrate, let it go. Let it go. Let it go, to where now, obviously, you both are my partners and you run your various departments as you will. Outside of some general business metrics, I don’t inquire as far as what you guys do because it’s no longer my responsibility. It’s your responsibility. That comes back down to the foundation of trust. I trust you guys will run your departments because you want the firm to grow and you want the firm to be a place for not just us, but for everybody here for years to come.

Nema Daghbandan:
So, the most difficult thing for me has been I’ve had to grow and I’ve had to change. I’ve reinvented myself probably three or four times since we started the firm.

Kevin Kim:
You’ve changed, Anthony, you’ve grown. And the beard is coming in strong. I’m the only guy in the office with no bear now, it’s-

Anthony Geraci:
If you could grow one, you would have.

Kevin Kim:
I would have grown one a long time ago. You know this, and it would have been perfectly quaffed and oiled and shaved. We all know this. All right, so you talked about something earlier on I wanted to touch on. We got a good question about this. I want to ask, Adam Sbeih at Socotra Capital asked us the perfect follow-up question. Good for Adam who’s been with the firm as a client for how long now? I mean, Adam’s been with us for-

Nema Daghbandan:
I think since the beginning.

Anthony Geraci:
Since inception. Since-

Kevin Kim:
Since inception. 10 years, 11 years now. Thank you, Adam. Nema, tell us about your first day at Geraci Law Firm. When was it first of all? Because you’ve been here forever, dude.

Nema Daghbandan:
Yeah. So, I actually thought about this the other day. What’s that when you try to get rid of your bad memories?

Anthony Geraci:
Do we grab your resignation letter?

Nema Daghbandan:
I don’t even know if you remember this. You were not here, neither was Christina my first day here. You were in Italy. So, I started here, and they were not here.

Kevin Kim:
What year was this first of all? What year was this?

Nema Daghbandan:
This is 2008.

Anthony Geraci:
2008.

Kevin Kim:
2008, so you’re-

Nema Daghbandan:
I’m a summer here.

Kevin Kim:
First-year summer? You were in law school.

Nema Daghbandan:
First-year summer.

Kevin Kim:
You were in law school.

Nema Daghbandan:
[inaudible 00:34:58] first-year summer.

Kevin Kim:
No, you’re in law school.

Nema Daghbandan:
I’m in law school.

Kevin Kim:
It’s your first 1L summer.

Nema Daghbandan:
Yeah.

Kevin Kim:
Okay.

Nema Daghbandan:
So, I know nothing. I’m literally an idiot, and I roll in and I’m like, “All right, cool.” I’m so excited. It’s my first day at a law firm. This is what my whole life is going to be about. And the only person there at the time was this degenerate person who I shared an office with who basically was like a degenerate gambler, right? And so, he would play video poker the entire time at his desk, right?

Nema Daghbandan:
And so, I walk in and I’m like, “What have I gotten myself involved with?” I get on a call with Christina and Anthony who were in Italy, and I hear Anthony trying to speak bad Italian in the background. I’m like, “What is happening here, right?” And there’s Christina who’s literally treating me as though I’m a 30-year attorney. She’s like, “Yeah, so I need you to write a demurrer, I need you to do all these things.” I’m like no idea what those words coming out of her mouth, right?

Nema Daghbandan:
I’m furiously writing down in a notebook everything that she’s saying, right? And she’s like, “Do you have any questions?” My only question I had with her was, “What’s a demurrer?” That was my first day.

Kevin Kim:
And by the way, that’s been a running joke here for 10-plus years now, and granted, IL, he doesn’t have to know about these things, but it’s so hilarious.

Nema Daghbandan:
I went to law school in Florida. We didn’t have demurrers there. It’s a fair question.

Kevin Kim:
So, you ask about what’s a demurrer. We go from there. Paint the picture for us. What was the firm like back then? How many employees? It wasn’t when we were at Martin. Was it at Martin?

Nema Daghbandan:
No, this was over at the Wells Fargo Tower off-

Kevin Kim:
Main.

Nema Daghbandan:
Main Street, yeah.

Kevin Kim:
Okay.

Nema Daghbandan:
It was what I think a lot of law firms are. Solo practitioners or really small law firms, right? I think it was a shared workspace where we had shared copiers and shared receptionists and a lot of these sorts of things. You had had your own receptionist for the law firm, so it was really kind of a personal assistant.

Nema Daghbandan:
The one thing I’m probably most proud of is to think about what that was and where we’re at. So, I remember at the time-

Kevin Kim:
Yeah, [crosstalk 00:37:08].

Nema Daghbandan:
This was back when you didn’t have cloud servers, right? And so, if you think about you have two… They’re basically renting two offices or three I think at the time. Christina had her own office, Anthony had his own office, and then I’m sharing it with the degenerate, right? So, that’s it. That’s all the office space that’s in there.

Nema Daghbandan:
And so, you have a server because we’re a law firm. And so, he’s got us a giant server whirring up in the background. It was so loud that he’s got to wear those little Bose noise-canceling headphones to get work done in his own office. And I’m screaming over him in his office every time I’m talking to him, right?

Nema Daghbandan:
But it’s like the true bootstrap organization, right? I mean, there is nothing. It is the true barebones and we’re doing martini lunch. Basically, back then it was like everyone’s getting wrecked at lunch basically because you could. You’re like three people. You can do whatever you want. There’s no rules.

Anthony Geraci:
Good old servers in my office days. I remember those.

Kevin Kim:
Yeah, yeah. And now, for those of you who haven’t visited us, so now we have two buildings in Irvine, California down here next to the Spectrum, 90 and 94 Discovery. We all have these nice offices. Anthony’s got this great space. He’s got his own little video conferencing station, three conference rooms. How the firm has grown the past 10 years, right? It’s amazing.

Kevin Kim:
There’s no place for this question so I’m just going to ask it. Adam asked me this question, and honestly, I told Adam, “Adam, you asked the best question.” This question is for Anthony, but I want to ask both of you. This is Adam’s question. I’m going to read it verbatim. “Hair plugs? Yes or no.” Adam, great question by the way. There’s no context for this question. I can’t wrap it up.

Nema Daghbandan:
No.

Anthony Geraci:
Let me prefix. Okay, so-

Nema Daghbandan:
I feel like we’ve got to answer two ways. One is, are you currently using hair plugs? And you need to give an honest answer. And then the second one is are you willing to go down that road if necessary?

Kevin Kim:
All right. First question, yes or no.

Nema Daghbandan:
No.

Kevin Kim:
No.

Nema Daghbandan:
I should candidly. It’s getting thin up there, gentlemen. And am I down? Yeah, I think I’m down. I think I’m going down that road. I’m going to get a lush… I want just a lush mane.

Kevin Kim:
Who’s that soccer player? Wayne Rooney. He got a bunch of plugs. He’s looking good now.

Nema Daghbandan:
Yeah.

Kevin Kim:
Yeah, yeah.

Anthony Geraci:
So, I don’t have plugs. I actually whispered no twice in the microphone. The second one is I don’t think I’m going to get plugs. If I’m doing anything, I’m going bald.

Nema Daghbandan:
Oh, really?

Kevin Kim:
Dude, go for it.

Anthony Geraci:
I’m going to go full bald.

Nema Daghbandan:
I don’t know, man.

Anthony Geraci:
I’m going to go Heisenberg.

Kevin Kim:
Me too. If I start losing it, I’m shaving it off. [inaudible 00:39:46] just cue ball.

Anthony Geraci:
I’m not sure I care. I’m not sure I care about hair.

Kevin Kim:
That or I want to buy a really sick ass toupee.

Anthony Geraci:
Yeah, yeah. Fair enough. Fair enough. Go just really [inaudible 00:39:56].

Kevin Kim:
Just one of these.

Anthony Geraci:
Flowing. That’s awesome.

Kevin Kim:
All right, so we want to ask some other questions about you guys because there’s some really good questions here, right? One thing that actually… We also have some questions from some of our favorite people in the office and they had some questions. This is actually a good one. We’re asked to make a lot of tough decisions and whether it be internally or advising our clients, and this comes from Melissa Martorella.

Anthony Geraci:
This is my favorite already.

Kevin Kim:
So, what is your process for making difficult to risky decisions and how do you get comfortable making them?

Nema Daghbandan:
Go on.

Anthony Geraci:
I don’t think you do.

Kevin Kim:
You don’t.

Anthony Geraci:
You don’t get comfortable. [crosstalk 00:40:36]-

Kevin Kim:
You’re not that risk-averse.

Anthony Geraci:
Huh?

Kevin Kim:
You’re not that risk-averse.

Anthony Geraci:
Oh, no, no. But you asked about difficult decisions though. I’ve never gotten comfortable with doing it, but I recognize the need for it because here’s… By the way, this is a learned skill. This isn’t something I’m born with, but I could tell you I’ve seen so many times the results of not making the difficult decisions. When you refuse to make the difficult decision, it’s like if you just want to bleed a little bit versus your whole arm getting cut off. Because it’s one of those little fires that keep on burning and burning and burning until a big fire.

Anthony Geraci:
So, that’s personnel as well as other things. I can tell you the number of times I’ve looked… And I don’t look at our payroll anymore, but I used to look at our payroll and I’m like, “Wow.” Literally, just wow. I was like that number is always impressive to me. Even today, that number is very impressive. I was like, “Wow, that is quite the big number because that’s mostly what we have here is payroll.

Anthony Geraci:
So, I guess the process for making the decisions. One, do I have to? Unfortunately, the answer is usually yes. There has to be some action involved because the inaction is worse than the action provided. Then it comes down to… I don’t want to call it logic base because I think that’s a cop-out, but really weighing the various answers because I don’t think there’s just one answer. There are several different answers, and the whole idea is to come up with several different answers.

Anthony Geraci:
And then I like to… If you go down each rabbit hole, what is the consequences of that particular action? Unfortunately, I can tell you there’s so many times where there’s not just one answer. “Oh, this is the best answer ever. This is going to solve everything.” Generally speaking-

Nema Daghbandan:
There’s five bad answers. Which one sucks the least?

Kevin Kim:
Right.

Anthony Geraci:
And I have different things depending on what’s going on. We haven’t gone through too many turbulent times, but the times we do, I like to say, if you will, back to the maritime. We have so many souls on board and their families. If I have to make that decision, we’re going to have to make that decision, and really have that discussion of what the decision may be. Some of them are fun decisions though, even difficult.

Anthony Geraci:
It’s do we have a number of conferences. One recent difficult decision. I kind of had input onto your point, but I let other people make the decision was are we going to have an in-person conference.

Kevin Kim:
Let’s have one.

Anthony Geraci:
There were so many… And talk about… Because you guys were involved in the decision-making too. There’s literally data for and data against. There was such-

Kevin Kim:
It was split right down the middle. You really… Yeah.

Anthony Geraci:
And so, what do you do with that? It comes down to then what is the best decision for the people and it’s not necessarily what’s best for us. It’s what’s best for the industry and what’s best for the environment. What’s best for us is put on the conference. Screw it, let’s just go. Everybody, whatever that risk is, but really the better part was let’s not have an in-person conference even though that will cost us to get out of contracts and stuff like that because it’s not the right thing to do.

Nema Daghbandan:
And it’s interesting because I’ve actually always admired your ability to make decisions because I think I am a generally indecisive person. So, that’s probably one of the biggest growing areas and biggest challenges being thrown into-

Kevin Kim:
It’s been the biggest burden growing as a [crosstalk 00:43:52].

Nema Daghbandan:
Yeah, it’s tough, right? Because oftentimes my natural… I’ll give you an example. I’ll be the person on Amazon that reads 50 reviews on a bike pump, right? It’s a $30 bike pump. Who cares? This is not a complex decision, but I’m going to want to read all the reviews. I’m the analytical thinker in the decision-making process, and so, that can get total analysis paralysis, right? And I can get bogged down in that kind of stuff.

Nema Daghbandan:
And that’s helpful, right? I think when you’re making… So, I feel like that’s a skill that’s useful that comes in handy when it’s coming to making big decisions. And I think that on that side of it, I’m generally… Same thing too. Trying to think of the option, the worst-case scenario if I go ahead and do that. What happens and visualizing what that looks like. But then also too, and it’s very much my personality profile. If it’s something that I don’t feel comfortable in my own head on, and most big decisions like that is, I ask a lot of people.

Nema Daghbandan:
I will go around to people who I don’t think have a dog in the fight and just seek their counsel on it. And I think that’s the one thing that I really seek most is there’s someone that I trust, know, and care about, and if I can present these facts to them and get their thoughts on it. And then they are oftentimes giving me windows of thought that I had simply never had and going, “Oh, I never saw it that way, but I see… You’re giving me an insight that I never had and it helps me get the final determination.”

Kevin Kim:
Like Yelp reviews.

Anthony Geraci:
Like Yelp reviews.

Kevin Kim:
Yeah.

Anthony Geraci:
Right.

Kevin Kim:
Right. It’s getting insight into the… It’s a challenge. I’ve talked with you about multiple tough things you had to go through in your team, decisions we had to make as an organization. It’s been challenging, and the biggest thing for me has always been the ramifications you just did not see coming.

Anthony Geraci:
Yes.

Kevin Kim:
And we’re suffering for that now with COVID, right? COVID has resulted in so many random results that “Whoa, that came out of left field,” right? And that’s the kind of stuff like, “Damn, man.” No matter how many times you’ve been through it, there’s always going to be that kind of “I did not expect that result” kind of situation.

Anthony Geraci:
Yes.

Kevin Kim:
I guess that goes to furthering Melissa’s question is like how do you get comfortable with that? For me, I have to tell myself, we made the best decision we possibly could and it’s better to act than not act, and kind of justify it almost. Left, right, make a decision, go. That’s kind of how I look at things, but it’s tough.

Anthony Geraci:
But that’s the-

Kevin Kim:
It’s tough.

Nema Daghbandan:
I guess here is the answer. If I’ve done that process, then I’ve done the right thing, right?

Kevin Kim:
Right.

Nema Daghbandan:
If I can’t with a straight face explain how I got to the result, then I just didn’t do my due diligence. And I feel in this situation it’s “Look, here’s the why I made the decisions. It may have been the wrong decision, but I can articulate exactly how I got here and why I got here. You may disagree with my logic. It’s okay.” Reasonable people can disagree on whether you would have made the same decision.

Kevin Kim:
And that’s the cusp of it. A lot of folks disagree with things, but they’re like they can’t put themselves in your shoes when they’re making that decision, right? They can’t understand what would you have done in that situation then? And then all they have is raw emotion about something that happened. And then now you’re stuck with that bill, if you will, right?

Nema Daghbandan:
That’s hard. That’s another hard one for me, in particular, is going back to personality profiles. My personality profile very much has me as a people pleaser, right? And so, the first… And in a leadership position, that’s a dumb personality profile.

Kevin Kim:
You got a target on your back.

Nema Daghbandan:
Right? If your job is trying to please everyone on your team all the time, you will surely please no one all the time, and you will have a lot of people trying to burn you down a lot of the time. I learned that lesson very much the hard way. So, getting comfortable with pissing people off and them questioning your judgment is one of the things that I think every person in a leadership position just has to learn and get comfortable with.

Nema Daghbandan:
It’s the same thing when I talk to people who are rising in our organization, “Don’t worry so much about… Be comfortable in your decision. You’re going to come to the decision. Half of the people in the room are going to like it, half of them are going to hate it, and that’s okay. You don’t have to try to get that 50% that hate it to agree with you. They’re never going to. So, be comfortable in yourself enough that it’s okay that you made this decision, and don’t feel the need to defend everything that you’re doing.”

Anthony Geraci:
I mean, there’s an old adage, it’s lonely at the top, right? That’s been some of my own growth that you guys may have seen also. I’m very much an affirmation type of person. I used to be at least. I wanted affirmation, look at me type of thing. Over the years, I could tell you the higher up you go, the less affirmation you get. No one remembers what good you’ve done. They do remember however what bad you’ve done.

Kevin Kim:
Oh, yeah. I had a conversation about that with one of our rising stars recently. She loves credit. It means you’re doing a great job. It means you’re rising because if you’re getting less and less applause, it means you’re more important, right?

Anthony Geraci:
And there’s a level I’ve gotten to, funny enough, I’m not saying it’s good or bad, it just is, of self-affirmation. I don’t really rely on anybody at this point to, “Hey, good job or anything like that.” For me, a good job is: did I do what I said I was going to do and when I was going to do it? And the results. Were the results acceptable or even better than I was expecting? That’s to me affirmation at this point.

Kevin Kim:
Cool. It’s a good question from Melissa. Thank you very much. I want to hop now about something a little bit more fun. So, we go to a lot of conferences, right? We do a ton of… Or used to before the Rona.

Nema Daghbandan:
We’re still going. We’re going to hop on Anthony’s plane after this.

Kevin Kim:
Yeah, we’re going to Vegas, right? So, we used to do a ton of conferences, right? And one of the questions we got, who is your partner in crime when it comes to the conference scene, right? Everyone’s got one. I know who yours is.

Nema Daghbandan:
Oh, no, but I have two answers. I’ll let Anthony go first.

Kevin Kim:
All right. Who’s your partner in crime when you’re-

Anthony Geraci:
Mine’s boring at this point. It’s funny I-

Kevin Kim:
All right, fine, how about this? Who was your partner in crime when you were really, really running and gunning, right? And then nowadays, who’s your partner in crime these days?

Anthony Geraci:
Well, gosh, again, that question spans 15 years of conferences. Generally, one of our clients at any given time, God. And different times too. I will give a captivating answer. I’m running with someone. I think there was a few of us at Caesar’s Palace, we went to Omnia. There was a group of 10 of us. So, I think Jeff Tesch was there, I think John Ingoglia was there. A few other people were there.

Anthony Geraci:
And as parties go, it’s 10:00 PM, 11:00 PM, 12:00 AM and people start trickling out. Me and Huy closed down Omnia at 4:30 in the morning. Huy, delete this if it gets you in trouble, but yeah. So, we were out until 4:30 in the morning. I think we both got to bed around five, and I literally had to get back up at 7:00 AM.

Kevin Kim:
That was a rough night.

Anthony Geraci:
That was a rough night, but I haven’t done that since other than that, it’s funny, the latest… And it was a whole full thing. I mean, before that, honestly, the Armanino guys. So, I remember Josh-

Kevin Kim:
They’re all dads now, so they don’t [crosstalk 00:51:15]-

Nema Daghbandan:
Yeah, they’ve mellowed out.

Anthony Geraci:
I have lots of stories. Anybody want to reach out to me, but Dean [inaudible 00:51:22].

Nema Daghbandan:
I can see Dean.

Anthony Geraci:
So, yeah, it’s different times, and now more… Maybe I’ve just gotten older or… I’m at bed by 10:00 PM at this point. I’m not running around because I’m tired and I want to be fresh for the next morning.

Nema Daghbandan:
And so, I’ve got multiple answers to this question. When it comes to being productive at a conference, Melissa is my go-to. We will tackle this together. We will hold each other accountable. We will push each other through this. The person is like, “Go out there and make something happen,” right? Melissa is very much that person for me.

Nema Daghbandan:
When it comes to the person who is generally not that fun unless it’s a lot of fun, it’s you, right?

Kevin Kim:
I need a lot of drinks. I need a lot of drinks.

Nema Daghbandan:
So, if you can get Kevin on a good one, you will have the best night of your life because as we call him, Dirtbag Kevin.

Kevin Kim:
I need a lot of alcohol, and I need to be in Miami apparently. That’s what it seems like.

Nema Daghbandan:
Dirtbag Kevin is a scene and it’s fantastic. It doesn’t matter who you’re with, how many people are around, Dirtbag Kevin is great. The person who I probably enjoy from a outside party perspective is Jeff Tesch, and let me tell you why. So, Jeff is the most optimistic human being I’ll ever know and I’ll give you a quick story to kind of illustrate to point because we’re at Omnia and something’s going… Music’s going on, they’re doing their…

Nema Daghbandan:
It’s Omnia, which is a weird place. If you really think about it, if you just step a few feet back, there’s apparently the fire system is basically going off is what the equivalent is. Imagine your fire sprinkler systems going off every few seconds. Music that I wouldn’t listen to anyways on a normal night, and it’s just the craziest. I’m a father of two kids. I don’t belong in that place. I’m not cool. I’m well done with all this, and neither is Jeff Tesch to be fair.

Nema Daghbandan:
But we’re sitting there and Jeff just puts his arm around me and he goes, “You know what? We work really hard, but you know what? This is pretty cool. It’s pretty cool that we get to experience this. Most people on earth will never get to experience this, and we’re so lucky that we get to sit here this night and listen to this moment.” And that optimism and that acceptance and gratefulness of all the things you got, I love people that love to just be thankful and grateful for where they’re at in life. And Jeff really epitomizes that to me.

Kevin Kim:
He does know how to have fun at those clubs. He knows everybody too.

Anthony Geraci:
Yes.

Kevin Kim:
He raised a hand one time and we were just like… Right to the front. It was impressive. Okay, so we have another really cool question. I’ve actually wanted to know more about because I don’t know enough about this myself. It actually has to do with you guys’ childhood. So, where did you guys grow up? This is from Jan at Arixa. Where’d you guys grow up and how did that influence your life path, right? This is not just where did you grow up.

Nema Daghbandan:
Anthony is much more interesting-

Kevin Kim:
You got a very… You lived in Alabama, I think.

Anthony Geraci:
[crosstalk 00:54:15].

Kevin Kim:
Yeah, right. So, where’d you guys grow up and how did that influence your life path.

Anthony Geraci:
I mean, I lived in six states and 30 different cities as a kid, so I moved around a lot. I think I kind of put my life story in a book, but I’ll expand maybe on certain parts of that. So, I don’t remember a lot before age 11, and why? I don’t know, I never did. The psychologist examined me. There’s something wrong with me. Tell me why I don’t remember. I just don’t.

Anthony Geraci:
But moved around a lot as a kid and it was more of my father being allergic to work than anything else. And so, I made my peace with that. He did his best for what he could, but I think there’s an old saying of don’t wish for an easy life. Wish for one of struggle and one you can overcome. I’ve definitely had the latter.

Anthony Geraci:
I could say if anything has prepared me for today, it’s been my childhood, so stuff like that. When I used to resent it and be very angry about the way I grew up, I’m just very grateful for the things that went on in the past. So, I’ve lived in six different states. Gosh, I grew up… I started working when I was 13. 12 if you count-

Kevin Kim:
What was your first job?

Anthony Geraci:
So, my very first job was 12. I was a database programmer. You may remember this.

Kevin Kim:
At 12?

Anthony Geraci:
Yeah. You may remember this. Do you remember dBase?

Kevin Kim:
Yes, I remember dBase. You were doing that at 12 years old? How were you doing that at 12 years old?

Anthony Geraci:
It wasn’t much.

Kevin Kim:
I was playing with Legos at 12 years old.

Anthony Geraci:
It’s just what I was doing, man. [inaudible 00:55:48] database was a newspaper guy, and he would pay me in Diet Cokes. So, there you go. 12 years old, not the brightest.

Kevin Kim:
Ah, the ’80s.

Anthony Geraci:
Right? My first real job, funny enough, was at a cleaners in Indiana. I was 13 and I worked the night shift. And yes, child labor laws notwithstanding, I was just happy I got a job making $5 an hour. It was like, “Fuck yeah, I have some control over my life now.” But yeah, those were some of the happiest times, and yeah, just working.

Anthony Geraci:
Yeah, then I went to… My father moved us to Alabama and that kind of picks up that story. I dropped out in the eighth grade. Since we moved around so much, I saw no point in doing anything. I got my GED finally when I was 17 and went to college. Went to Wallace Community College in Dothan, Alabama. Got my associate’s and then went to Auburn for a bachelor’s in history.

Anthony Geraci:
And then I’m like Alabama… It’s a great city, guys, for sure. It’s just not for me. It was rather boring at the time. I was like, “I do not want to go to law school in Alabama,” because I learned a statistic at the time, wherever you go to law school, 75% of the people stay there. I didn’t understand the mobility aspect at the time in law.

Kevin Kim:
So, we’d all be in Birmingham right now practicing who knows what?

Anthony Geraci:
Who knows what, man? That wasn’t for me, so I applied and got into Chapman and they gave me a scholarship. So, I packed my bags, took a U-Haul out here, and moved to California in 2002.

Kevin Kim:
So, that childhood of yours, moving around a lot, having those jobs as a teenager, how did that influence your path today? You have all kinds of random jobs as a young person, right? A very young person. Almost a child. How did that influence how you managed this firm to where it started to today?

Anthony Geraci:
Gosh, I mean, I could tell you very different ways I’ve managed it, right? Just because of who I was. And that almost goes back to my comment I’ve had to reinvent myself a few times to get where we’re at today. But I’ll tell you, I think part of it is everything is based on a strong work ethic, and I don’t know a single entrepreneur out there who doesn’t have one. I mean, Jan especially, I know him pretty well, and I know what it’s taken for him to build Arixa.

Anthony Geraci:
I don’t know anybody who’s built a company, “Oh, yeah. I only work four hours a week and it’s great and all I do is work nothing, and it just builds itself.” There’s an old adage of overnight success 20 years in the making, and that’s every entrepreneur I know. So, I don’t think you get out of this easy. It’s painstaking work, and so, I think that’s been my foundation, if you will, a strong work ethic versus when we started the firm, I was very much doing the work.

Anthony Geraci:
As Nema’s calling Italy, I’m still very much involved in doing stuff. I was with our transactional practice at the time, and we were just helping out. Obviously, now Nema’s running our transactional practice. It’s gone from, really, I can’t even call myself a CEO when we founded. I was just a doer if you want, an attorney. Maybe once we grew to five attorneys, I was manager. I was able to manage things, but there was no great vision or anything like that, and I think Nema hit the nail on the head when we all got together in 2015. There was a vision and there was a need to be a CEO.

Anthony Geraci:
Again, I’ve seen myself first doing, stepping back, stepping back, stepping back, to where it is today and I’ve actually stepped back in a little bit. And that’s okay because I know what my job is. My job is to go where I’m needed, and that will change depending on what the firm needs at the time.

Kevin Kim:
So, Nema, you grew up in Orange County like me. Not nearly as interesting.

Nema Daghbandan:
Yeah, I was going to say the where is not that interesting, right?

Kevin Kim:
Right.

Nema Daghbandan:
So, for me, the interesting element is the who, right? Who my parents are because that really shaped my course. Both my parents are Iranian, and so, they came here in the late ’70s to get educated and then to go back to Iran and live a great life, right?

Kevin Kim:
And the revolution.

Nema Daghbandan:
Yeah, the revolution happens, they’re here. I’m born in 1982, and the revolution doesn’t. And then they start the Iran-Iraq War, and they’re like, “I don’t think we can go back there.” So, America’s our country, and our kids will be American and all the dreams of going back, they’re dreams. We’re never going back home as a family at least.

Nema Daghbandan:
And so, we grew up… It was interesting because they were very affluent in Iran, but that money pipeline because what’s interesting in the Iran story is it was very much a revolution that switched the haves and have-nots. So, they had steady streams of money and everything coming in, and then this happens and the pocketbook dries up. My mom always tells me, she’s like, “When you were born, we had 500 bucks.” And I was like, “The hell am I going to do with myself?”

Nema Daghbandan:
She was like, “I wasn’t working, I don’t speak English,” all these sorts of things, right? There’s a true epiphany of holy… We didn’t even know how to exist in society. And so, the interesting thing was we grew up mostly in working-class neighborhoods. And so, we moved down to Orange County when I was young. I was about six years old, and Orange County was nothing back then. Most of the cities that exist there didn’t exist back then.

Kevin Kim:
Where we are right now used to be a big orange grove.

Nema Daghbandan:
Correct. Correct. And so, the interesting thing was I never understood that we didn’t have money. I mean, my parents were fantastic at shielding the truth from me. Still, to this day, they’re very good. They’ll go to the hospital and never tell us. They’re terrible. They never want us to feel pain. But the interesting, circumstantially speaking, is they had… They were in a really bad situation.

Nema Daghbandan:
Right, they didn’t speak English well. They were never going to be professionals here because of the language barrier. They didn’t know how our institutions worked. They had no idea how to… They were literally navigating a foreign system, right? And so, for that, my dad drove a taxi until I was 14 years old, right? And that meant he worked six days a week, 14 hours a day and I saw him on Sundays.

Nema Daghbandan:
And so, that’s all I had as the vision of what a father is, right? Is someone who’s going to kill himself for his family. Same thing with my mom. My mom had a degree back in Iran from… She was a dietician, and so, she took that skill and started working in various hospitals, and so, she was gone all the time, right?

Nema Daghbandan:
For me, I didn’t really know that there was a world in which your parents don’t kill themselves, right? For me, that was very easy because it took all the options away. I never had a thought process of like… There was never a question of whether you had to work hard in life. There was never an alternative to that.

Nema Daghbandan:
And so, all I witnessed my whole life were two people who were killing themselves for their family, never needing to communicate that they were killing themselves for the family because it was just what I got to witness with my eyes, right? And so, that really guided me. It was very interesting to me when I started going to school and other things, and I started taking my own life very seriously, was I just found myself being able to outwork most people because that was all I knew, right?

Nema Daghbandan:
There was never an excuse. I could never be like, “Oh yeah, I don’t need to work that hard.” My mom didn’t speak a lick of English, do you know what I mean? If my parents could do it, what was my excuse going to be? You know what I mean? And the beauty of growing up in South Orange County is you’re around a bunch of affluent people, right? So, we were the poor people around affluent people, and so it-

Kevin Kim:
A bunch of entitled people too.

Nema Daghbandan:
A bunch of… But it exposed me to a world that I never understood. I remember being in high school, and I’ll give you a story just to illustrate the gap in the world that I for the first time is I’ve always been a car aficionado. I’ve always loved cars, and back then, when I was growing up in high school, the Dodge Viper had just come out.

Kevin Kim:
I remember, yeah.

Nema Daghbandan:
So, I was talking to one of my classmates about the Dodge Viper, and I was like, “Oh yeah, I’ve got the model car. I’ll bring it in.” And he’s like, “Yeah, we’ve got one too,” right? And I bring it in and I was like, “Yeah, this is the [inaudible 01:03:38].” And he goes, “Oh no, we have the car.” I was like, “Oh, I’ve got posters of it in my room, and I have this model car. Oh, but you have the actual car.”

Nema Daghbandan:
And it was like, “Wow, the world is so big, and the opportunities are so different. But that was the best blessing of my entire life was to grow up without, right? Because I now am terrified, and I’m sure you guys are kind of in a similar vein is my kids will not experience that, right?

Kevin Kim:
Absolutely.

Nema Daghbandan:
That’s what drove me to kill myself, and they’ll never get to witness that. So, they’ll see me work hard, that’s fine, whatever. But they won’t see me struggle like my parents struggled.

Kevin Kim:
Let me ask you this though, right? Because it translates through various different experiences. I think for you and I, immigrant family experience.

Nema Daghbandan:
Yes.

Kevin Kim:
It’s embedded in the immigrant experience. For you, a very unique childhood. You were-

Anthony Geraci:
More white trash.

Kevin Kim:
There you go.

Nema Daghbandan:
I didn’t want to say it, but he said it for me, so-

Anthony Geraci:
Yes.

Kevin Kim:
At the end of the day, very similar experience in the sense that you have to work hard and it’s all you’re taught.

Nema Daghbandan:
Yeah, no alternative.

Kevin Kim:
No, alternative. Hardest worker in the room. I was taught the same thing. My parents always told me, “You look different. You’re going to have to work twice as hard to be taken seriously.” Just the lesson we’re taught.

Nema Daghbandan:
There’s something to be said about removing the safety net, and I think I speak for you guys, but I’ll definitely speak for myself. There was no safety net. There was no going back. There was no option to fail.

Kevin Kim:
Right.

Nema Daghbandan:
If that means I’m working 20, 22-hour days and I’m not sleeping, so be it because the option is there isn’t one.

Kevin Kim:
No, and I think also if you look at who are our friends in the industry and favorite clients in the industry, with respect, they kind of have the same work ethic and approach.

Anthony Geraci:
The Tedesco story, right? I get so many people that just-

Kevin Kim:
Right, those brothers, man. They work so hard, man. I mean, those guys are on the road non-stop. Shout out to the Tedesco brothers, and they built that business from nothing with literally just spit, and bubble gum, and grit. That’s something that I respect immensely, and you see that over and over and over again in this industry I feel like.

Kevin Kim:
As opposed to a lot of other… I worked in other industries before, and you see a lot of just kind of… I’ll call it institutional people, Harvard grad, always worked on Wall Street, comes from a Rich family kind of person. You see it. They don’t really work that hard. You try to reach them at three o’clock in the afternoon, they’re not working.

Kevin Kim:
All right, so last question here, and this is a good one to close on. I think this is from Huy. Yeah, this is from Huy, and I don’t understand this question really, but it’s a really dope one. All right, so question from Huy Do from PrideCo. There have been many iconic duos in history, Hans Solo and Chewbacca, Jordan and Pippen, Thelma and Louise, Ace and Gary, Cardi B and Offset, Harry and Lloyd, Tyler Durden and the Narrator. Which do you identify most with?

Nema Daghbandan:
Personally? As a duo?

Kevin Kim:
As a duo. As a duo.

Nema Daghbandan:
As a duo?

Kevin Kim:
Yeah, yeah, yeah, yeah.

Nema Daghbandan:
Interesting.

Kevin Kim:
Because before I came in the mix, it was you guys, right? Now we work together on a lot of things, but before me it was you guys, right? And I did preface these questions about I’m asking you guys questions.

Nema Daghbandan:
I’m trying to think of are we Rich Katz and Gregg Bernstein? And who is how?

Anthony Geraci:
Shout out to Rodeo Capital.

Nema Daghbandan:
And which one of us is which. We may have switched those roles. That’s probably the duo I could think of.

Anthony Geraci:
I think it’s changed, funny enough. Over time, back to that whole thing about how things change. I think it was Batman and Robin at one point, and that’s clearly not. But it’s funny, we joke a lot about how we’re often wearing the same outfit and everything like that. It’s shirts, but obviously-

Kevin Kim:
Nema started wearing these striped colorful shirts with flamingos on them all of a sudden. I don’t understand it.

Anthony Geraci:
So, maybe it’s Tyler Durden and the Narrator because they’re one and the same type of thing. So, yeah.

Kevin Kim:
Right. Right, right, right, right. And they all have beards. It’s just he grew a beard and it got really awkward. Now, everyone has beards and… Okay, guys. Well, honestly, this has been great. We never have an opportunity to kind of get you guys’ thoughts and insights and get to know you guys better because a lot of folks know who we are, what we do, and they don’t really know much about what’s going on up here, where you guys come from, all that kind of stuff. So, really, thank you, guys, for taking the time today.

Anthony Geraci:
Wow, thanks for having us.

Kevin Kim:
I really hope that a lot of our question askers are listening in. If we can give any closing remarks, do you guys want to give any closing remarks for the audience out there listening in?

Nema Daghbandan:
I’ll say is the questions and the people who asked them are really [inaudible 01:08:29]-

Kevin Kim:
Oh, yeah.

Nema Daghbandan:
… of why I love what we do. I really love what we do and I’m so thankful. This was accidental. I mean, we didn’t talk about this, but we joke that Anthony-

Kevin Kim:
It was a random idea on a Tuesday afternoon. I just started asking our friends in the industry, “Ask us some questions.”

Nema Daghbandan:
And it reminds me this is accidental how we got here, right? But I’ve always envisioned in my life that I would be a small fish in a big pond kind of thing. I always wanted this institution. I wanted a Fortune 500 name. I always wanted this in my mind, right? And then ended up in an industry in which we very much ended up being these big fish in a small pond, and thank goodness, you know what I mean?

Nema Daghbandan:
Because every time you say a person’s name, I can start laughing like, “Oh, gosh, it’s Huy. What’s this guy going to… What’s up his sleeve, right?” And it makes me miss Huy.

Kevin Kim:
Right.

Nema Daghbandan:
Right? You talked about John like, “Oh, man, John’s going to ask a smart question. John’s a smart guy.” You really get to know… And candidly, we don’t do that much work with either of them. It’s not because of this business relationship. We’re in this space where we got to know these people, you know what I mean?

Nema Daghbandan:
I’m going to have my Jeff Tesch, we’re so lucky. We’re so lucky to be in a place where you can meet people, be genuine with them, get to know them, get to know an industry. I don’t know, man.

Kevin Kim:
And they’re so influential too. They have their own insights and they’re leaders in their own right in their own space. Just to be able to just know them and even have that colleague relationship. You wouldn’t get that in that other [inaudible 01:10:00]. But you’re not going to do that with a CEO of some… I don’t know, Fortress or something like that. It’s not going to happen, and that’s the beauty of this space, I think.

Nema Daghbandan:
Right.

Anthony Geraci:
You know it’s funny. I’m sitting here and realizing I’ve done this 15 years now, and it is funny-

Kevin Kim:
Old man Geraci.

Anthony Geraci:
I am the old man now. It’s weird to say, right?

Nema Daghbandan:
He knows his beard is coming next.

Anthony Geraci:
Pretty much. I have to tell you how in the industry I was called The Kid back in the day. It’s funny how what was before as we were growing, very first days in private lending. Myself in 2005, you in 2008, and when were you hired? 2000-

Nema Daghbandan:
2012, I think.

Anthony Geraci:
’12? Yeah.

Kevin Kim:
’12, ’13, I don’t remember anymore.

Anthony Geraci:
Clients, and obviously, we’ve got the mainstays like Adam, Socotra, and all those people, but really being the old guy in the room is kind of weird in the sense of who I grew up with in the industry. I can tell you one thing that’s been really interesting. It’s the same game, but it’s played differently. A lot like poker in my thing.

Anthony Geraci:
I saw people come and go early on and there’s quite a few people obviously that are mainstays. We talked about Steve Pollack earlier, right?

Kevin Kim:
Yeah.

Anthony Geraci:
I remember Steve Pollack since day one, and here we are 15 years later. So, there’s always going to be the mainstays, but there’s also going to be newcomers. People who are attracted to the space for whatever reason. I think that can only make the industry stronger and better because I can tell you one thing, private lending will never go away. I mean, if you look at the Truth-in-Lending statement, it was created because of private lenders back in the 1960s.

Anthony Geraci:
This industry will survive one way or the other because it’s always going to do what banks won’t. So, to me, it’s been a joy. It’s been my entire career. Will always be my career, and it’s just been a joy to see the different ways our clients solve issues because I love solving it with them. But also, I love being just a part of it.

Anthony Geraci:
If you’re part of the banking industry, if you’re part of different things, almost to your point, small fish in a big pond, what can you say you’ve contributed? My goal, at least I hope people say, is we made an impact in the industry, and that’s all I can ever hope for and [crosstalk 01:12:14].

Kevin Kim:
Yeah, I think we already have, but I think we continue to… And credit to you Nema, a lot of the legislative activity you’re doing has helped shaping the way this industry is headed. A lot of the recommendations or the quote-unquote blueprints and the business models that we’ve been pushing over the years have been shaping the way people are doing business in this space, and you see that, right?

Kevin Kim:
I had a phone call the other day with a client, and he told me, “Dude…” Actually, it wasn’t me. Olivia, my associate, had a phone call with one of our clients who has been around for a couple of years now, and he was talking to an investor. And the investor said, “Oh, you use Geraci. You got street cred with me now.”

Kevin Kim:
That told me, wow, we really are making a difference. If a random investor in Orange County knows who we are and acknowledges that client for using us, that is influence.

Nema Daghbandan:
You know what’s funny is that happened to me. We were at MBA earlier this year and we’re out at a bar. And so, I met some attorney at some big firm and I said, “Oh, I’m in a little boutique in Irvine. It’s Geraci.” She goes, “We know who you are.” I was like, “Oh, okay. That’s cool,” you know what I mean? It’s interesting because that wasn’t the intent, right? It wasn’t this design of… But I just feel like especially is the three of us genuinely care.

Kevin Kim:
Right.

Nema Daghbandan:
Right? And have just genuinely tried our best and our hardest. We have summer associates right now. Every year we bring in summers, and they’re idealistic, and all these great things and it’s awesome. We were talking and they said, “Tell me a little bit about the culture, the best way you can describe it.”

Nema Daghbandan:
I was like, “It’s honesty to a fault,” right? And I’ll give an example. We are oftentimes overpaid in a loan closing transaction. So, what will happen is we get our fee in the settlement statement or we’ve gotten paid in advance, and then another check comes in. Every single time we’ll send that check back because that’s not our brand. That’s not who we are, right?

Nema Daghbandan:
All we need to do is care about you 150% every single time, and then the money will come. We’re never going to think about the money first, right? And I think that’s really helped us and we’ve never thought about building all these things. It hasn’t been like, “Oh, I can’t wait. I hope these people write us…” It was just like do the right thing, all the time, every single time. If you do that thing every single time, then all the great things come alongside with it. It was never our intent, but it’s great that it got there.

Kevin Kim:
Yeah, I think it ties to service and a certain kind of mindset, right? And it’s kind of interesting, the three of us all have a background in retail.

Anthony Geraci:
Yeah.

Kevin Kim:
I always talk about… And even Ruby… She’s got a background in retail, and when I hire, I look for background in retail. The customer service focus and the relationship focus. That kind of stuff is lost today in a lot of the business models you see out there, online shopping and all that. But we’ve been doubling down on that for the past five, six years now, and I think it’s really the…

Kevin Kim:
I got asked the question recently, what is the X factor? I tell them it’s that. It’s basically like we’ve got a bunch of friends in the space. We’ve got friends.

Anthony Geraci:
We don’t want to let them down.

Kevin Kim:
Yeah, we don’t want to let down the industry because they look at us and they’re our friends. A lot of the people out there, they may not even be our clients, but they’re our friends.

Anthony Geraci:
Yeah.

Nema Daghbandan:
Yep.

Kevin Kim:
All right, guys. Well, that’s it for us today on the podcast.

Nema Daghbandan:
Thank you, Kevin.

Anthony Geraci:
Thank you, Kevin.

Kevin Kim:
I hope you guys had fun with this great bottle of… I just realized-

Nema Daghbandan:
This is delicious by the way.

Kevin Kim:
I just realized this whiskey is 56% whiskey.

Nema Daghbandan:
Yeah, I realized it about halfway through this.

Anthony Geraci:
Cheers.

Kevin Kim:
Cheers.

Nema Daghbandan:
Cheers.

Kevin Kim:
Thank you, guys, and we’ll see you on the next one.