Formula
How to Calculate MOIC
MOIC is multiple on invested capital: total value, realized plus unrealized, divided by the capital invested. It ignores time entirely.
Multiple on Invested Capital
MOIC = Total Value / Total Invested Capital
Where
- Total Value
- = Realized returns + unrealized value of remaining holdings
- Total Invested
- = Total capital invested
What Is MOIC?
MOIC stands for multiple on invested capital and is the simplest measure of an investment's result: total value divided by the money put in. The formula is MOIC = (realized proceeds + unrealized value) / invested capital. It is most often quoted at the deal level and gross of fund fees, which is how Invest Europe's reporting guidelines treat portfolio-level multiples, in contrast to TVPI, which is a fund-level figure stated net against paid-in capital. MOIC contains no time dimension, so a 3.0x earned in two years and a 3.0x earned in ten are identical under it. That is why it is always read next to IRR.
Worked Example
Suppose a fund invests $6,000,000 in a company across a $2,000,000 Series A and a $4,000,000 Series B follow-on. Four years later it sells half the position for $9,000,000 and the remaining half is carried at $12,000,000. Realized proceeds are $9,000,000, unrealized value is $12,000,000, and invested capital is $6,000,000. MOIC is ($9,000,000 + $12,000,000) divided by $6,000,000, which is 3.5x. Of that, the realized portion is $9,000,000 over $6,000,000, or 1.5x. The 3.5x headline therefore rests on a mark for the part that has not been sold. All figures are hypothetical.
Why MOIC Matters
MOIC is the number that answers how many times the money came back, which is the question a person actually asks. It is also the easiest number to quote misleadingly, because it can be gross or net, realized or including marks, and at deal or fund level, with no label. Anyone reading a track record should establish which of those four choices is in force before comparing anything.
Related Terms
Frequently Asked Questions
How do you calculate MOIC?
MOIC is calculated using the formula: MOIC = Total Value / Total Invested Capital. MOIC is multiple on invested capital: total value, realized plus unrealized, divided by the capital invested. It ignores time entirely.
What is a good MOIC?
What constitutes a "good" MOIC depends on context — the fund's stage, vintage year, and strategy. Check our benchmarks and calculators for specific ranges.