David Grutman's 1 rule for wealth: own your restaurant IP

David Grutman went from bartender to founder of Groot Hospitality, a collection of Miami restaurants and nightlife venues that includes Komodo, Swan and Story. His advice for entrepreneurs: never give up ownership of your brand.

"Intellectual property, I think is the most important thing in the world," Grutman said in The WSJ Money Interview. "Upon the exit of selling your brand, is where you gain real wealth."

Grutman said he gave investors in Komodo — his first major restaurant concept — a portion of the intellectual property, allowing them to share in the brand's upside. He now refuses to do a restaurant deal without owning a piece of the IP. People who take fees instead of equity "miss out on growing," he said.

For founders and investors in the hospitality sector, Grutman's approach represents a shift away from traditional fee-for-service models toward equity-based structures that can generate outsized returns when a brand is sold. The strategy mirrors how private equity firms structure carry in their funds, where the bulk of compensation comes from profit participation rather than management fees.

The Equity Mindset

Grutman said he often discusses the importance of equity ownership with celebrity and athlete friends who are considering business ventures. His advice: take a stake, not just a paycheck. The difference between collecting a fee and owning a piece of the brand can mean the difference between a one-time payment and a multi-generational asset, he said.

The Celebrity Connection

When investing in founders, Grutman said his signature move is connecting them with high-profile partners such as actor Mark Wahlberg via FaceTime. "That's my move, to connect people right away on FaceTime, so they're like talking to the person," he said. The strategy gives founders immediate access to celebrity cachet that can accelerate brand awareness and customer traffic — a form of marketing spend that would otherwise cost millions in traditional advertising.

This article is for informational purposes only and does not constitute investment advice.