Definition
MOIC
MOIC (Multiple on Invested Capital) measures how many times an investor's money has grown, regardless of how long it took.
MOIC = total value (realised plus unrealised) divided by capital invested. A 3x MOIC means the investment is worth three times what was put in. Unlike IRR, MOIC ignores time, so a 3x over two years and a 3x over ten years look identical on this measure.
PE and VC funds report MOIC alongside IRR to give a complete picture: MOIC shows the magnitude of returns while IRR shows the speed. Related measures split realised from unrealised value via DPI and TVPI.
Related terms
- Internal Rate of Return (IRR)IRR is the annualised, time-weighted return on an investment that accounts for the timing of cash flows.
- TVPITVPI (Total Value to Paid-In) is the ratio of a fund's total value — realised distributions plus remaining holdings — to the capital LPs have paid in.
- DPIDPI (Distributions to Paid-In) measures how much cash a fund has actually returned to its investors relative to the capital they paid in.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.