Multiple on invested capital (MOIC)

Multiple on invested capital (MOIC) measures how much money a private equity or venture capital investment has returned relative to the amount originally invested, expressed as a simple multiple. It is calculated as MOIC = (realized value + unrealized value) / paid-in capital, where realized value is cash already distributed back to investors and unrealized value is the current estimated worth of holdings not yet sold.

An MOIC of 2.0x means the investment is worth, on paper or in cash returned, twice what was put in. Unlike internal rate of return, MOIC does not account for how long it took to generate that return, so a fund that doubled an investor's money in three years and one that took twelve years both show the same 2.0x MOIC despite very different annualized performance. This makes MOIC a useful, simple gross measure of the scale of return, but a poor stand-alone measure of efficiency over time.

Investors typically look at MOIC alongside internal rate of return, a related figure called total value to paid-in that uses the same formula at the fund level, and a public market equivalent comparison against a public benchmark, to get a fuller picture of a fund's performance. A common pitfall is comparing MOIC across funds of very different vintage years or holding periods without also weighing the time value of money.