What is MOIC?
MOIC (multiple on invested capital) is the total value an investment has returned or is currently worth divided by the amount invested. A 3.0x MOIC means each dollar invested is now worth three dollars.
Also known as: multiple on invested capital · investment multiple
In plain terms
MOIC is the simplest way to say how much an investment has grown. Invest $1, get back or hold $2.50, and the MOIC is 2.5x. It ignores how long that took.
How it works
The formula is (realized value + unrealized value) ÷ invested capital. Realized value is cash already returned, such as sale proceeds or distributions. Unrealized value is the current estimated value of what is still held, which for private companies is based on valuations rather than market prices.
Because time is not in the formula, MOIC is usually reported alongside IRR, which does account for timing. A fund might also split the figure into realized and unrealized parts so readers can see how much has actually been returned in cash.
Example
Hypothetical: an investor puts $500,000 into a startup. Three years later they sell part of the stake for $400,000 and the remaining shares are valued at $1,100,000. MOIC = ($400,000 + $1,100,000) ÷ $500,000 = 3.0x, of which 0.8x is realized and 2.2x is still on paper.
Why it matters for founders and investors
Investors use MOIC to compare outcomes across deals and funds, and founders encounter it when investors explain return expectations. Knowing whether a quoted multiple is gross or net of fees, and how much of it is unrealized, is essential to interpreting it.
Common misconceptions
A higher MOIC is not always the better result. A 2.0x over two years and a 2.0x over ten years have the same MOIC but very different annualized returns.
Frequently asked questions
What is the difference between MOIC and IRR?
MOIC measures how many times the money has multiplied, while IRR measures the annualized rate of return and so depends on timing. Investors usually look at both together.
What is a good MOIC for venture capital?
Return expectations vary by stage, strategy and fund, so there is no single target. Because many early-stage investments fail, venture investors typically look for a small number of positions with very high multiples to drive overall results.