Metrics & Performance
MOIC
Last updated
Quick Answer
Multiple on Invested Capital — the total return on an investment expressed as a multiple of the original capital deployed. A 3x MOIC means you received $3 for every $1 invested.
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
MOIC (Multiple on Invested Capital) is a simple ratio that expresses total return as a multiple of the original investment. If you invest $1M and receive $4M back (including your original $1M), your MOIC is 4x.
Unlike IRR, MOIC is time-agnostic — it doesn't matter whether the return came in 3 years or 10 years. This makes it easy to communicate but incomplete as a standalone metric. MOIC is often referred to as the 'money multiple' or 'cash-on-cash return.'
At the fund level, MOIC is used to express how much of the fund's invested capital has been returned or is valued at. At the deal level, it shows the gross return on a single investment. Target gross MOICs for VC funds are typically 3-5x, with net MOIC (after fees and carry) being lower.
In Practice
A VC fund invests $500K in a startup at Seed. The company is acquired for $150M. The fund's ownership at exit is 8% (after dilution), giving them $12M in proceeds. The MOIC on this investment is $12M / $500K = 24x. At the fund level, if the fund invested $30M total and has returned or is marked at $90M, the fund MOIC is 3x.
Why It Matters
MOIC is the clearest way to communicate raw return magnitude. For founders evaluating potential VC partners, a fund's MOIC track record signals whether they have the portfolio density and ownership discipline to generate real returns. For LPs, MOIC alongside IRR and DPI gives a complete picture: how much did they make, how fast, and how much is real vs. paper?
VC Beast Take
The VC industry often conflates gross MOIC (before fees and carry) with net MOIC (what LPs actually receive). A 3x gross MOIC at a 2/20 fund translates to roughly 2.3x net after fees and carry — still good, but not 3x. Always clarify whether the MOIC cited is gross or net when evaluating fund performance claims.
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Comparisons
Tools & Resources
Careers That Use This Term
This concept is especially relevant for these venture capital roles:
Frequently Asked Questions
What is MOIC in venture capital?
MOIC (Multiple on Invested Capital) is a simple ratio that expresses total return as a multiple of the original investment. If you invest $1M and receive $4M back (including your original $1M), your MOIC is 4x.
Why is MOIC important for startups?
Understanding MOIC is critical for founders navigating the fundraising process. It directly impacts deal terms, valuation, and the relationship between founders and investors.
What category does MOIC fall under in VC?
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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