IRR (Internal Rate of Return)

The annualized return that makes an investment's future cash flows equal what was put in, the one number that lets deals of different sizes and timelines be compared.

It is the yardstick the search-fund studies report in (aggregate IRRs run roughly 18% to 34% across the major datasets) and the threshold a distribution waterfall's later steps often key off; a fast small exit and a long large hold can post the same dollars at very different IRRs, so read it beside the multiple and the hold length.