Val Sklarov’s Capital Authority–Burden Inversion Law (CABIL) explains why investors don’t fail because markets are volatile—but because responsibility for outcomes expands while authority over timing, exit, and structure contracts. Capital appears mobile. Burden becomes fixed.
This law reveals why seasoned investors fear obligation more than loss.
1. Authority Over Capital Shrinks as Exposure Grows
CABIL begins with an investment inversion:
The more capital you commit, the less control you retain.
Early investing allows:
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Timing discretion
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Portfolio optionality
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Narrative flexibility
As positions scale, authority evaporates.
2. The Three Capital Authority–Burden Inversions
CABIL maps where imbalance hardens.
| Inversion | Burden That Grows | Authority That Shrinks | Outcome |
|---|---|---|---|
| Liquidity Inversion | Forced holding | Exit timing | Capital lock-in |
| Structural Inversion | Covenant & leverage risk | Decision freedom | Constraint dominance |
| Narrative Inversion | Public & LP scrutiny | Story control | Reputation gravity |
When all three invert, investors hold maximum exposure with minimal agency.
3. Why “Long-Term” Often Means “No Control”
Patience is not authority.
CABIL shows inversion when:
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Selling moves markets
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Structures punish exit
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Oversight limits discretion
At that point, conviction masks immobility.
4. Yield vs Authority Preservation
High returns often compensate for lost control.
| Yield-Chasing Capital | Authority-Aware Capital |
|---|---|
| Accept illiquidity | Preserve exit discretion |
| Trust leverage | Cap structural burden |
| Ignore optics | Control narrative exposure |
| Defend positions | Maintain refusal rights |
Val Sklarov emphasizes that capital is weakest where exit requires permission.
5. Strategic Implications
For investors:
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Audit who controls exit conditions
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Treat leverage as authority transfer
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Avoid structures with narrative captivity
For allocators:
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Diversify by authority regime
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Limit non-reversible exposure
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Price burden density over IRR
CABIL reframes investing as authority management, not return maximization.
6. The Val Sklarov Principle
“You stop being an investor when you can’t decide when to leave.”
— Val Sklarov
CABIL explains why durable investors move slower—and why slowness preserves power.