IRR to MOIC Converter

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Understanding IRR vs. MOIC

In private equity and venture capital, Internal Rate of Return (IRR) and Multiple on Invested Capital (MOIC) are the two most critical performance metrics. While they are related, they tell different stories:

MOIC (The Multiple)

"How much money did we make?"

MOIC measures the total cash returned divided by the total cash invested. It ignores time. A 2.0x multiple means you doubled your money.

IRR (The Speed)

"How fast did we make it?"

IRR measures the annualized compound return. It accounts for the time value of money. A 2.0x return in 1 year is amazing (100% IRR), but in 10 years it's mediocre (~7% IRR).

The Conversion Formulas

The mathematical relationship between Geometric IRR and MOIC is:

MOIC = (1 + IRR)^Years
IRR = (MOIC)^(1/Years) - 1

Enter values to see the conversion and analysis here.

Frequency Asked Questions

What is a good MOIC in Private Equity?

In Private Equity, a standard target is a 2.0x - 2.5x MOIC over a 5-year period. This roughly translates to a 15-20% IRR. For Venture Capital, targets are much higher (10x+ for early stage) to account for the high failure rate.

Why is my IRR negative even with a positive MOIC?

This shouldn't happen mathematically. If MOIC > 1.0x (you made money), IRR must be positive (> 0%). If MOIC < 1.0x (you lost money), IRR will be negative. The only exception is if your holding period is extremely long, pushing IRR close to 0%, but it won't be negative.