Capstone Secrets: How to Save on Taxes and Boost Employee Pay

On my Let's Go Win podcast I sat down with my friend Daven Michaels — entrepreneur, New York Times best-selling author, global speaker and founder of the San Juan Social Club. Daven has been building businesses since he was 15, exited companies multiple times, and is relentless about creating impact while staying humble. In this conversation we covered his move from LA to Vegas to Puerto Rico, how he built community, his origin story in entrepreneurship, an innovative employee-benefit tax strategy called Capstone, and why joint ventures and relationships are still the engine behind massive growth.

From Hollywood Hills to Vegas — and then Puerto Rico

Daven and his family lived in a three-level glass house next to the Hollywood sign for 15 years. Taxes and a desire for change pushed him to look for a lower-tax home, and Vegas looked appealing. The move was impulsive — movers loading boxes while he had a moment of doubt looking over the empty glass rooms. He chose to go anyway.

Vegas, he says, raised his quality of life — the strip became a 24-hour networking hub where friends and opportunities flowed in rather than him having to go out and chase them. A key lesson from that move:

• Break out of your comfort zone — sometimes a radical change improves life and opportunity.

• Lower tax positions can materially change your financial outcomes.

• Smaller markets let you be a bigger fish: in a smaller pond you can make a larger impact more quickly.

Why Puerto Rico?

Daven first heard about Puerto Rico’s tax incentives over a decade ago. He eventually made the move and found the island an ideal place to have outsized impact in a smaller community. Important tax points he outlines (with the caveat that he is not a tax advisor):

• Puerto Rico is a U.S. territory with special tax incentives administered locally by Hacienda.

• Under certain decrees, qualifying businesses can enjoy a 4% tax on corporate export income, and in many cases 0% capital gains and dividends.

• Qualifying often includes requirements like annual charitable contributions (current entrants may need to give $10,000/year; older decrees could be $5,000).

Daven notes that the incentives often target "export" businesses — if you run a local rental or purely local service, different tax rules apply — but for many entrepreneurs these incentives are transformational. He also stresses: seek professional tax and legal advice before relocating or restructuring.

"I could make a big impact in a smaller place. You become a big fish in a smaller pond."

The San Juan Social Club: community, networking and a cruise

Shortly after moving to Puerto Rico, Daven started a small group to bring expats and locals together. Eight years later it grew to over 3,000 members. Key features of the San Juan Social Club:

• Monthly free events to remove barriers and encourage broad participation.

• Annual San Juan Social Club cruise — a workation focused on high-level entrepreneurs, networking and philanthropic giving.

• A platform for sharing information about tax incentives, local opportunities, and collaborations between locals and newcomers.

The cruise runs on Virgin and is designed as an adults-focused, boutique-style networking experience with high-quality restaurants, meetups and speakers. Daven announced that the 2026 cruise is scheduled for March 21–28 out of San Juan; when booking he asked folks to select "Let's Go Win" in the dropdown so they can connect in the "cool kids section."

How Daven started — early entrepreneurship and lessons learned

Daven began his first company at 15 designing clothing for music groups. MTV’s emergence launched those bands into record deals, and that early momentum exposed him to large clients and big opportunities. He sold his first company to a public company at 26–27 — a very early first exit.

Lessons and traits he highlights as drivers of his long-term success:

• Start early — time in the game compounds experience and relationships.

• Be persistent — the path includes gains, losses and reinventions.

• Manage and inspire people — Daven credits being an exceptional manager of people as one of his strengths.

• Be open to opportunities, but guard against the shiny-object trap. Focus and disciplined execution matter.

• Your brand becomes your business — your word, credibility and transparency are essential.

"Your word is gold."

Nature vs. nurture — a personal moment

In a powerful personal aside, Daven shared that after a 20-year search he met his biological father and learned more about his biological family. That reconnection reinforced some of his beliefs around nature and nurture, and he reflected on what it meant to finally see genetic similarities and to learn more about his roots.

The moment was meaningful not because his childhood was lacking — Daven repeatedly praised the parents who raised him — but because knowing his origins brought closure and context to parts of his identity.

Capstone: a tax-backed employee benefit that helps employers, employees and valuations

One of the most practical segments of our conversation dove into a program Daven is licensing in Puerto Rico and promoting to U.S. employers: Capstone Health (private-label in his territory). He framed it as a legal tax/benefit design that produces wins for employers and employees with little to no net cost.

How Capstone works (high level):

• Target customers: companies with roughly 10–20+ employees (preferably 20+).

• Mechanics: uses specific tax code provisions (related to the Affordable Care Act) to create an employer FICA deduction.

• Employer impact: on average $600–$800 annual FICA tax deduction per employee, lowering payroll taxes and increasing profit.

• Employee impact: employees typically see a net increase in pay (often around $1,000–$2,000 annually) plus wellness benefit overlays.

• Implementation: no disruption to existing benefits; funded through legal tax advantages; Daven’s group indemnifies clients as part of their offering.

Case study he shared:

• A client with ~2,000 employees will save about $1.5M/year after implementation.

• When that recurring profit is considered in valuation multiples, Daven explained the annual savings can translate into a dramatic increase in company valuation — he cited an example where a $1.5M annual profit improvement translated into roughly a $15M valuation uplift in eight weeks and contributed to an ESOP-style transaction approaching $250M for that business.

Why don’t more people know about this?

• People assume “too good to be true.”

• The details require careful legal and accounting setup — pushing many to say “no” instead of doing the diligence.

• Word-of-mouth is growing, but it’s still earlier in the awareness curve compared to programs like PPP or ERC.

Daven’s recommendation: look into it, do your due diligence with trusted professionals, and consider how such incentives can materially improve employee compensation, employer cash flow, and company valuation.

Joint ventures, affiliates and building a networked business

One theme we returned to repeatedly was the power of relationships and collaboration. Daven’s marketing background taught him the leverage of affiliate and JV relationships — from thousands of small affiliates to a handful of large JV partners who can move tens or hundreds of thousands of dollars in a single event.

Key structures and mindsets:

• Affiliates = pay-for-performance traffic. You only pay for the sales you get.

• JV partners = the top-tier affiliates who can generate large spikes in business via webinars, joint launches, or co-marketing.

• Three acquisition channels Daven uses: his global influence (1.5M followers), paid advertising, and personal relationships / warm market.

• For complex benefit programs like Capstone, warm-market relationships and trusted JV partners outperformed paid channels initially.

"I called those affiliates my invisible workforce."

The San Juan Social Club cruise — what to expect

Highlights of the cruise format Daven described:

• Hosted on Virgin — boutique, adult-focused cruising with no kids and no traditional dining-room constraints.

• Specialty restaurants are included (Michelin-inspired menus) and the vibe is a boutique hotel on water — fewer announcements, more curated social experiences.

• Heavy emphasis on meetups, small-group connection, and light but actionable speaker sessions — think "workation" meets mastermind.

• Participants include a blend of local Puerto Rican entrepreneurs, people attracted to the island’s tax incentives, and global entrepreneurs Daven has met through speaking over the years.

If you want to connect and cruise with this community, Daven asked folks to book via the San Juan Social Club cruise site and select "Let's Go Win" in the dropdown to connect in his group.

How to reach Daven (and a few closing thoughts)

Daven recommends visiting his website for contact information, and following him on Instagram, Facebook, and LinkedIn.

Final takeaways from our conversation:

1. Be willing to make bold moves — relocating, changing tax strategy, or reframing your business can create outsized returns.

2. Invest in relationships — joint ventures, affiliates, and in-person experiences (dinners, cruises, masterminds) accelerate trust and deal flow.

3. Your brand and your word are your currency — build transparency and keep your commitments.

4. When a legal, well-vetted opportunity can materially help employees and increase company value, do the homework and consult experts.

I loved this conversation with Daven because he shows up with energy, a bias toward action, and a focus on creating win-win structures. If you’re an entrepreneur who wants to meet high-level peers, explore tax-friendly strategies, or just be part of a community that helps you do bigger work — check out the San Juan Social Club and consider whether programs like Capstone might be a fit for your team.

Until next time, remember: your mindset matters.

Watch this full podcast episode on YouTube