The Twelve Domains

Operational risk frameworks tend to fail in one of two directions. Either they expand into exhaustive checklists — hundreds of items, weighted equally, surfaced together — which is unusable in any meaningful sense. Or they collapse into three or four high-level categories that confirm what the company already knows.

The Risk Engine sits between those failures. Twelve is the smallest number of axes that captures the operational shape of a company across stage, sector, and structure; it is also the largest number that an operator can hold in working memory while making a decision. Every domain on the list has, at some point in the partners’ combined operating career, been the domain that determined an outcome.

What follows is not a definitive taxonomy. It is the institution’s working set, calibrated quarterly, and the explanation of why each one is on it.

The twelve cluster into four operating axes: position (Key person, Customer concentration, Capital & runway), substrate (Technology dependency, Compliance & regulatory, IP & legal structure), motion (AI maturity, Supply chain, Market & competitive), and governance (Talent & culture, Financial controls, ESG & reputational).

Each axis describes a class of failure. Position failures are direct: the company runs out of cash, the founder leaves, the top customer churns. Substrate failures are slower but heavier: the platform deprecates, the regulator changes the regime, the IP is found to be unowned. Motion failures are competitive: a better-resourced entrant arrives, the category commoditises. Governance failures are structural: the team will not stay, the reporting will not satisfy a board.

A company in serious trouble usually fails in more than one axis simultaneously. A company in early-stage trouble usually fails in only one, but loudly. The instrument is designed to surface both shapes.

A score in any domain is an estimate of the likelihood that the exposure becomes a determining factor in the next twelve months — calibrated against companies of the same stage, sector, and capital position. It is not a probability of failure.

The instrument therefore does two things a checklist cannot. It ranks exposures by likelihood and weight, not severity in isolation; and it surfaces the combinations — pairs of domains that, scored together, indicate a different conversation than either domain alone would warrant.

In practice, the top three exposures account for roughly seventy per cent of the institutional attention given to a company. The lower-ranked exposures inform the standing record but rarely change the next mandate.

Weights on each domain are calibrated quarterly against the institution’s active register. As mandates accumulate, the relative weight of certain domains drifts — Customer concentration has steadily increased over the past four quarters as the firm’s commerce engagements grew; Capital & runway has held its weight throughout.

The twelve themselves are not currently slated for change. Each was introduced because the absence of it had a cost; none has yet earned removal. This dossier will be reissued when that changes.