MOIC (Multiple on Invested Capital)

Definition

Total cash returned over cash put in, ignoring how long it took.

Why It Matters

A $500k stake that pays back $1.5M is a 3.0x MOIC, and unlike IRR it ignores how long the money was out. It is the number the search-fund studies report beside IRR, and aggregate returns cluster near 2.0x across the major datasets. IRR alone can flatter a fast, small exit, so read the multiple and the hold length together. A 2.0x in three years and a 2.0x in ten years hand investors the same dollars at very different annual rates.

In numbers: Investors put $2,000,000 into a deal and receive $5,000,000 when it sells: a 2.5x MOIC, whether the hold ran four years or eight.