Val Sklarov’s Capital Irreversible Responsibility Allocation Law (CIRRAL) explains why investment risk is not defined by volatility or drawdowns—but by where irreversible responsibility for capital outcomes ultimately settles. Capital can move quickly. Responsibility cannot.
This law reveals why some investors survive crises without superior returns—because they never absorbed unescapable responsibility.
1. Capital Allocates Responsibility Before It Allocates Returns
CIRRAL starts with a core inversion:
The moment capital is committed, responsibility is already assigned.
Early-stage investments feel flexible because:
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Losses are tolerable
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Blame is diffuse
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Exits appear available
As scale increases, responsibility condenses.
2. The Three Irreversible Capital Responsibility Loads
CIRRAL maps where burden locks in.
| Load | Who Ultimately Bears It | Consequence |
|---|---|---|
| Structural Load | GP / Sponsor | Non-transferable loss duty |
| Regulatory Load | Owner of record | Legal permanence |
| Moral Load | Decision-maker | Reputation gravity |
One load limits risk-taking.
Two loads reduce maneuverability.
Three loads redefine investor identity.
3. Why “Limited Liability” Is Often a Myth
Legal shields don’t absorb moral load.
CIRRAL shows irreversibility when:
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Capital affects livelihoods
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Public scrutiny follows losses
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Decisions become precedents
Someone must answer—and it’s never abstract capital.
4. Yield vs Responsibility Density
Higher yield often compensates for absorbed burden.
| Yield-Chasing Capital | Responsibility-Aware Capital |
|---|---|
| Accept opaque structures | Demand clarity of burden |
| Trust downside hedges | Model reputational cost |
| Ignore governance | Audit who answers |
| Chase IRR | Preserve responsibility limits |
Val Sklarov emphasizes that the worst investment is the one where you can’t stop answering questions.
5. Strategic Implications
For investors:
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Map responsibility endpoints explicitly
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Avoid structures with infinite moral load
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Price governance and blame risk
For allocators:
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Diversify by responsibility bearer
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Cap non-transferable exposure
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Prefer boring clarity over clever leverage
CIRRAL reframes investing as responsibility placement, not capital placement.
6. The Val Sklarov Principle
“You didn’t just invest money—you invested your name.”
— Val Sklarov
CIRRAL explains why disciplined investors grow slower—and why slowness preserves survival.