Embedded fitness landscapes-part 1: How a venture capitalist maps highly subjective risk

Sensemaking frameworks are used to develop the metaphor of shifting, multidimensional fitness landscapes mentally embedded in increasing higher levels of abstraction. Cognitive maps illustrate the simplified visualization used by early stage venture capitalists (VCs) to understand venture risk. Risk assessments of new, high-growth potential ventures are often highly subjective. In this first article of a three-part series, we define the nature of the uncertainty and equivocality that VCs face and relate these to traditional approaches to categorizing risk. Next, we introduce fitness landscapes and review two approaches relating these to business strategy. The metaphor is extended to focus on multiple embedded landscapes rather than a single map. Map instability is linked to ongoing sensemaking activities of the VC. Finally, the remaining two papers in the series on cognitive representation and experiential learning of VCs are previewed. The papers in the series all focus on developing a new research approach to understanding the conceptualization and management of highly subjective risk by VCs.