Terminology for Capital Allocation
The Lexicon of Capital
In category creation, he who defines the terms owns the market. Here are the official definitions for AI Judgment Infrastructure™ and the terminology powering systematic capital allocation.
- AI Judgment Infrastructure™
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A technological framework designed to systematize high-stakes capital allocation decisions. Unlike Information Infrastructure (which retrieves and organizes data), Judgment Infrastructure interrogates the logical coherence of an investment thesis.
Context:
Used by Institutional VCs and Private Equity to audit deal flow, identifying structural risks before capital is committed.
Keywords: Capital Allocation, Due Diligence, Systematized Judgment.
- Brittle Assumption
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A foundational premise in a business model that, if proven false, causes the entire venture to collapse. Unlike a standard "Risk" (which can be mitigated), a Brittle Assumption is binary: it holds, or the company dies.
Example:
"We assume consumers will change 20 years of behavior to save $2."
Critical for capital allocators to identify before committing investment.
- The Clarity Score™
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A standardized probabilistic score (0-100) indicating the structural integrity of a startup narrative for capital allocation purposes. It is calculated by weighting four vectors:
- • Logical Consistency — Mathematical coherence between claims
- • Evidence Provenance — Audit trail of data sources
- • Semantic Stability — Language precision vs. marketing fluff
- • Unit Economic Physics — Compliance with economic gravity
Note:
It is not a prediction of success, but a measure of investability.
- The Judgment Graph™
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A proprietary vector database connecting 3,000+ outcome-labeled venture narratives. It maps semantic patterns in pitch decks to historical commercial outcomes (IPO, Bankruptcy, Acquisition), allowing the engine to "pattern-match" strategy against the "Universal Grammar of Failure."
Unlike generic LLMs trained on "everything," the Judgment Graph is outcome-labeled: every pattern is connected to a known result. This enables deterministic capital allocation risk assessment rather than probabilistic guessing.
- Logical Consistency (Vector I)
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The mathematical coherence between a startup's claims in their investment thesis.
Test:
Does the Customer Acquisition Cost (CAC) defined on Slide 8 mathematically support the Runway projections on Slide 12? If the math conflicts, the narrative is incoherent for capital allocation.
- Narrative Provenance (Vector II)
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The audit trail of data sources in an investment thesis. It distinguishes between:
- • Verified Data — First-party metrics with source documentation
- • Inferred Estimates — Market sizing, TAM projections
- • Hallucinations — Unsupported assertions masquerading as facts
Critical for venture capital due diligence.
- Semantic Stability (Vector III)
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A measure of language precision in startup narratives for capital allocation evaluation.
- ✓ High Stability: Specific, falsifiable claims (e.g., "30% MoM growth")
- ✗ Low Stability: "Marketing Fluff" (e.g., "Huge opportunity," "Disruptive tech")
Used to filter signal from noise in venture investment evaluation.
- Regulatory Physics (Vector IV)
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The compliance with market laws and economic gravity in venture theses. Checks against:
- • Insurmountable regulatory barriers (e.g., FDA phases, banking licenses)
- • Unit economic impossibilities (e.g., negative gross margins at scale)
Essential for private equity and venture capital risk assessment.
- The Judgment Gap
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The failure to apply rigorous interrogation to investment theses despite having abundant information. This is the core problem causing systematic failures in capital allocation.
The Judgment Gap explains why sophisticated teams with comprehensive data still make systematically flawed venture decisions. They have access to every metric and comparable, yet consistently miss critical risks that experienced partners identify intuitively.
Discovered by askOdin's founder through analysis of hundreds of deals on both sides of the allocation table at SilkRoute and Awesome Ventures.
- The Clarity Framework™
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askOdin's proprietary, end-to-end system that transforms the public Clarity Protocol into institutional-grade, defensible judgment for capital allocators.
The complete infrastructure for systematically evaluating venture investment theses. It includes:
- 1. The "Scar Tissue to Data Asset" Process
- 2. The Judgment Engine & Analytics
- 3. The Human-AI Collaboration Layer
- Strategic Incoherence
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A fatal state where a founder pursues mutually exclusive go-to-market strategies simultaneously (e.g., trying to be a high-touch Enterprise B2B platform and a low-cost B2C app at the Seed stage).
This is the most common reason early-stage ventures fail to gain traction despite strong product-market fit signals. A critical filter for capital allocators.
- Innovation Theater
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Non-binding partnerships, LOIs (Letters of Intent) with no commercial value, or pilot programs designed to make a corporate partner look innovative without resulting in recurring revenue.
The Crucible™ flags these aggressively during venture capital due diligence, as they are often presented as "traction" but have zero predictive value for actual growth or capital deployment success.
- The Clarity Protocol
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The public blueprint of six essential questions for investment rigor that form the foundation of askOdin's judgment methodology for capital allocation.
These questions represent the minimum viable interrogation framework every capital allocator should apply to high-stakes decisions. The Protocol is open and freely available—it's the "recipe" for rigorous analysis.
The Clarity Framework™ is how askOdin systematically executes this protocol at institutional scale for venture and private equity.
- 4-Dimensional Risk Audit
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askOdin's systematic interrogation framework that stress-tests investment theses across four critical domains:
- • Market: Is the addressable market real, accessible, and economically viable for capital allocation?
- • Model: Do the unit economics scale positively under realistic investment assumptions?
- • Moat: Is the competitive advantage defensible against well-funded venture-backed incumbents?
- • Management: Does the team have domain-specific scar tissue and execution capability?
This framework is hardcoded into The Crucible™ and Clarity engines to ensure every venture thesis receives comprehensive structural interrogation.
See these principles in action.
Test your pitch deck against the Judgment Graph™ and get your Clarity Score™ in 3 minutes.
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