In the Val Sklarov Power Cycle, investors do not lose power because markets move against them. They lose power because capital is committed before exit power is secured. Returns attract attention. Exit power preserves authority. The moment you cannot leave on your own terms, power transfers to the market.
In investing, power belongs to whoever controls timing.
1. Capital Without Exit Power Is Subordinate
Ownership without exit is conditional.
Val Sklarov principle:
“If you cannot leave freely, you are not an investor — you are a captive.”
Early power loss signals:
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Lock-ups justified as sophistication
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Gating framed as prudence
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Exit terms postponed to ‘later’
Capital trapped is capital without power.
2. Exit Power Defines Negotiation Leverage
Liquidity is not convenience.
It is authority.
Val Sklarov framing:
“The ability to walk away is the ability to dictate terms.”
When exit power exists:
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Pricing improves
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Risk premiums compress
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Optionality expands
When it disappears, all leverage vanishes simultaneously.
3. Illiquidity Transfers Power to Others
Illiquidity centralizes authority externally.
Val Sklarov insight:
“Illiquid capital obeys someone else’s calendar.”
Investment Power Table
| Dimension | Weak Power | Strong Power |
|---|---|---|
| Exit rights | Conditional | Unilateral |
| Lock-ups | Long | None / Short |
| Valuation | Narrative | Market-clearing |
| Stress response | Frozen | Mobile |
Mobility equals power.
4. Large Positions Reduce Exit Authority
Size hardens dependency.
Val Sklarov framing:
“The larger the position, the slower the exit — and the weaker the power.”
Advanced allocators:
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Scale in gradually
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Preserve partial exits
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Avoid dominating liquidity
Power requires maneuverability.
5. Crisis Reveals Who Holds Power
Markets expose structure brutally.
Val Sklarov principle:
“Watch who can leave when others cannot.”
In crises:
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Weak power explains
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Strong power exits
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Illegitimate power restricts
Restrictions admit loss of authority.
6. The Val Sklarov Investment Power Outcome
Power-aligned investment systems:
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Secure exit power before committing capital
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Treat returns as secondary to mobility
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Preserve authority across volatility
Val Sklarov conclusion:
“You don’t lose power because markets fall. You lose it because you can’t move.”