Valuation and returns
MOIC and IRR calculator
Two numbers describe an investment outcome: how many times the money came back, and how fast. Enter the investment, the exit proceeds and the years held.
One investment, one exit. For several cash flows over time, use a spreadsheet XIRR function.
How it works
MOIC (multiple on invested capital) is proceeds divided by the amount invested. It ignores time: 3x in three years and 3x in ten years have the same MOIC.
IRR adds time. For a single investment and a single exit it equals the annual compound growth rate: MOIC raised to 1 / years, minus one.
The formula
- MOICProceeds / amount invested.
- IRRMOIC ^ (1 / years) - 1.
- ProfitProceeds - amount invested.
Worked example
$1 million invested and $3.5 million returned after five years is a 3.5x MOIC and about 28.5% IRR.
Put the numbers in your data room
Fund managers put deal-level MOIC and IRR in the track record folder of their LP data room. LPs recompute both from the cash flows, so include the dates and amounts.
MOIC and IRR calculator FAQ
Which matters more, MOIC or IRR?
Both. LPs want enough MOIC to make the risk worthwhile and enough IRR to beat other uses of the money.
Why can IRR look high on a small gain?
A quick exit at a small multiple can show a high IRR. That is why MOIC is reported alongside.
Is this gross or net?
As entered. Fund reporting shows both: gross before fees and carry, net after.