Angel Investors Network
    Glossary

    Multiple on Invested Capital

    A metric measuring total return as a multiple of the original investment, calculated by dividing total distributions plus remaining value by invested capital.

    Multiple on Invested Capital (MOIC) is a performance metric that measures the total value generated by an investment relative to the amount originally invested. The calculation is straightforward: divide the sum of all distributions received plus the current value of remaining holdings by the total capital invested, resulting in a multiple that shows how many times an investor has multiplied their initial investment.

    For example, if you invest $100,000 and later receive $150,000 in distributions while still holding equity worth $100,000, your MOIC is 2.5x ($250,000 total value divided by $100,000 invested). This metric is particularly common in venture capital and private equity, where it provides a quick snapshot of investment performance without the time-value considerations of metrics like Internal Rate of Return (IRR).

    Why It Matters

    MOIC gives investors an immediate understanding of absolute returns without requiring complex calculations or assumptions about reinvestment rates. This simplicity makes it invaluable for comparing investments across different time horizons and for communicating performance to limited partners or stakeholders who need clear, accessible metrics. While MOIC doesn't account for how long it took to achieve returns—a critical limitation—it remains the go-to metric for evaluating whether an investment met minimum return thresholds, such as the common venture capital target of 3x or higher.

    Example

    An angel investor puts $50,000 into a startup in 2019. By 2023, the company has made two dividend payments totaling $30,000. The startup is now raising a Series B round at a valuation that values the investor's remaining stake at $90,000. The MOIC calculation is ($30,000 + $90,000) / $50,000 = 2.4x. This tells the investor they've generated 2.4 times their original investment over four years. However, another investment that returned 2.4x in just 18 months would have the same MOIC despite being a significantly better investment on a time-adjusted basis—which is why investors typically examine MOIC alongside IRR.

    Internal Rate of Return (IRR), Cash-on-Cash Return, Distributed to Paid-In Capital (DPI)