MOIC (Multiple on Invested Capital)

How it works

MOIC = total value / invested capital. A fund with a 3x MOIC has tripled its money on paper. MOIC ignores time — a 3x return in 3 years is much better than a 3x in 10 years (which is why IRR is also reported). VC fund MOICs of 3x+ on a 10-year fund are considered top-quartile; 5x+ is exceptional.

Related terms

• DPI (Distributions to Paid-In capital)
  DPI is the ratio of actual cash returned to fund investors (LPs) to the capital they paid in — the realized portion of a fund's return.
• IRR (Internal Rate of Return)
  IRR is the annualized rate of return on an investment, accounting for the timing of all cash flows in and out.