MOIC

A simple measure of how much you multiplied your money

MOIC, Multiple on Invested Capital, answers a blunt question: how many times did I grow my investment? If a PE or VC fund put ₹10 crore into a startup and that stake is now worth ₹40 crore, the MOIC is 4x. It is calculated as total value (realised plus unrealised) divided by capital invested.

MOIC is the language of private equity and venture capital, where investors talk in multiples, a "3x fund" or a "10x exit", rather than percentages.

What MOIC ignores: time

MOIC's great strength is also its weakness: it ignores time. A 3x return in two years is spectacular; the same 3x over fifteen years is mediocre. Because of this blind spot, investors pair MOIC with IRR (Internal Rate of Return), which annualises the return and accounts for how long money was deployed.

The two tell different stories. A fund can have a high MOIC but a low IRR (big gain, very slow), or a high IRR but modest MOIC (quick flip of a small amount). Serious LPs always look at both together.

Realised versus paper gains

MOIC also blends realised value (cash actually returned from exits) with unrealised value (paper marks on holdings not yet sold). A fund boasting a high MOIC may be sitting largely on unrealised marks that could shrink before exit, especially relevant in India after startup valuations were sharply written down in the funding winter. The cash-on-cash variant, DPI (Distributions to Paid-In), shows only what has truly been returned.

For Indian investors in AIFs, PE and VC funds, MOIC is the headline scorecard, but a sophisticated read pairs it with IRR and DPI to know whether a flattering multiple reflects real, banked returns or optimistic paper valuations awaiting the test of an actual exit.