MOIC

MOIC (Multiple on Invested Capital) is the ratio of total value (realized distributions + remaining NAV) to total invested capital. It expresses returns as a multiple — '3x' means $3 returned (or worth $3) for every $1 invested.

`MOIC = (Realized Distributions + Residual Value) / Invested Capital`

When calculated on paid-in capital (rather than invested), this is the same as TVPI (Total Value to Paid-In). The two terms are often used interchangeably.

MOIC vs IRR — when each matters:

• IRR is time-sensitive — early distributions look great; late distributions look poor. Use IRR to compare velocity of returns.
• MOIC is time-blind — 3x is 3x whether it took 4 years or 12. Use MOIC to compare absolute return magnitude.
• LPs typically underwrite to a minimum MOIC AND a minimum IRR — e.g., target 3x MOIC at 20%+ IRR for VC.

Gross vs Net MOIC:

• Gross MOIC — measured at portfolio level, before fund-level fees, expenses, and carry.
• Net MOIC — measured at LP level, after all costs. This is what LPs care about.

Realized vs Unrealized split:

Well-reported MOICs break down into:

• DPI — Distributions to Paid-In (realized cash multiple) — see DPI.
• RVPI — Residual Value to Paid-In (unrealized multiple on the holdings still in the portfolio).
• TVPI = DPI + RVPI — total value multiple.

A young fund with 2.5x TVPI = 0.3x DPI + 2.2x RVPI is showing mostly paper marks. A mature fund with 3.0x TVPI = 2.7x DPI + 0.3x RVPI is showing mostly realized cash — much more reliable.

Indian benchmarks (illustrative, vintage-dependent):

• Top-quartile early-stage VC: Net TVPI > 3.5x
• Top-quartile growth-stage PE: Net TVPI > 2.5x
• Median market: 1.5–2.0x

Pitfall: Reporting MOIC on invested rather than paid-in capital makes unallocated commitments look free. LPs care about paid-in dollars — use TVPI conventions.