Metrics & Performance
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Quick Answer
Multiple on Invested Capital — the total value returned divided by the total capital invested, expressed as a multiple (e.g., 3x means tripling your money).
Multiple on Invested Capital
MOIC = Total Value / Total Invested Capital
Where
MOIC (Multiple on Invested Capital) is the most straightforward return metric in venture capital and private equity. It measures total value generated relative to total capital invested, ignoring time. Formula: MOIC = Total Value / Total Invested Capital. A 3x MOIC means every dollar invested generated $3 in total value. Unlike IRR, MOIC is time-agnostic — a 3x return in 2 years and a 3x return in 10 years have the same MOIC but very different IRRs. For VC funds, top-quartile performance is typically 2.5-3.5x net MOIC. For individual deals, successful outcomes range from 3-10x for solid exits to 100x+ for rare outliers (the 'fund returners').
What good looks like
Why It Matters
MOIC is the simplest way to evaluate whether an investment made money. LPs increasingly prefer MOIC over IRR because it's harder to manipulate — you either returned the capital multiple or you didn't. When a GP says they generated '3x net,' every LP immediately understands the outcome.
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What is IRR in venture capital?
IRR (Internal Rate of Return) is the annualized return on a VC investment, accounting for the timing of cash flows. Top-quartile VC funds target net IRRs above 20-25%.
What is TVPI and MOIC in venture capital?
TVPI (Total Value to Paid-In Capital) is the total value of a fund including unrealized gains. MOIC (Multiple on Invested Capital) is the gross investment multiple on a deal or fund.
This concept is especially relevant for these venture capital roles:
MOIC (Multiple on Invested Capital) is the most straightforward return metric in venture capital and private equity. It measures total value generated relative to total capital invested, ignoring time. Formula: MOIC = Total Value / Total Invested Capital.
Understanding MOIC is critical for founders navigating the fundraising process. It directly impacts deal terms, valuation, and the relationship between founders and investors.
MOIC falls under the metrics category in venture capital. This area covers concepts related to the quantitative measures used to evaluate fund and company performance.
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