VC & PE Glossary
What Is MOIC?
Updated
Definition
MOIC (multiple on invested capital) measures how many times an investment's current or realized value exceeds the original amount invested—expressed as a ratio such as 3.0x on $1M invested.
Also called: multiple on invested capital
Useful for: LPs, GPs, Investors
MOIC (multiple on invested capital) is the ratio of value received—or marked—to capital deployed on an investment. It answers a simple question: how many dollars back per dollar in?
How it works
At the deal level:
MOIC = (Proceeds + remaining fair value) / Total invested capital
Example: a fund invests $5M across a Series A and two follow-ons ($8M total). The company exits for $40M and the fund owns 20% → $8M proceeds. MOIC = $40M / $8M = 5.0x on that holding (simplified; actual waterfall and fees adjust net to LPs).
At the fund level, gross MOIC resembles TVPI: total fund value divided by paid-in capital. DPI is the realized slice (distributions only). IRR adds the time dimension—a 3.0x MOIC in four years beats 3.0x in twelve years.
MOIC ignores fees and carry unless specified as net MOIC. LP reports often show both gross deal MOIC (GP marketing) and net fund metrics after economics.
Why it matters
- LPs: MOIC benchmarks fund selection and re-up decisions, especially alongside DPI to see how much is cash versus paper.
- GPs: Portfolio reviews rank winners and losers by MOIC; reserve allocation chases deals that can return the fund.
- Founders: Exit modeling with lead investors often uses MOIC thresholds (“need 5x+ on this fund’s entry to move the needle”).
Common mistake
Quoting headline MOIC on unrealized marks at peak valuation, then treating it like realized DPI when the company later raises down or sells flat.
Related ideas
See also TVPI, DPI, IRR, and mark-to-market.
Related terms
- DPI — DPI (distributions to paid-in capital) measures how much cash a fund has returned to LPs relative to what LPs contributed—real money back, not paper gains.
- IRR — IRR (internal rate of return) is the annualized discount rate that makes the net present value of all cash flows — investments in and distributions out — equal to zero.
- TVPI — TVPI (total value to paid-in capital) is a fund performance ratio — total value (distributions plus remaining NAV) divided by capital LPs contributed — showing gross multiple before timing.
Common questions
Short answers for founders, LPs, and operators