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Glossary

MOIC

Definition

Multiple on Invested Capital (MOIC) measures how many times your original investment has grown. A MOIC of 2.0x means your investment has doubled in value. Unlike IRR, MOIC doesn't account for time — a 2x return in one year looks the same as a 2x return in ten years. MOIC is useful for quickly understanding the magnitude of returns.

MOIC answers a single blunt question: how big? Put in $30,000, and if the position is now worth $150,000, your MOIC is 5.0x. It's the number angels quote in conversation because it's intuitive and captures the magnitude of an outcome — a 50x company is a story; a 1.5x company is a rounding error. In a power-law portfolio, the whole job is finding the rare position with a double-digit MOIC.

Its blind spot is time, which is exactly where IRR comes in. A 5x over 3 years and a 5x over 15 years have identical MOIC but completely different IRRs, and only one of them is a great use of capital. It's also worth distinguishing gross MOIC (before fees) from net MOIC (after any fund or syndicate fees and carry), since those can differ meaningfully when you invest through an SPV or fund. Read MOIC for magnitude, IRR for speed, and DPI for whether it's real yet.

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