MOIC (Multiple on Invested Capital)
MOIC measures return as a multiple of capital invested, independent of time.
Definition
MOIC compares total value returned (realized + unrealized) to capital invested. Unlike IRR, it ignores timing and focuses on magnitude of value creation. Allocator Context Allocators use MOIC to compare outcomes across strategies where holding periods vary, often pairing it with IRR for a complete picture. Decision Authority MOIC informs manager selection and portfolio role evaluation, especially in venture and growth strategies. Why It Matters for Fundraising Managers should present MOIC with holding period context; high MOIC over long timeframes can still produce modest IRR. Key Takeaways Magnitude metric (not time-aware) Must be paired with IRR Common in venture/private equity Helps explain value creation