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Free ForeverNo SignupMOIC & IRRUpdated 2026

Venture Return Calculator

Calculate the return on a venture investment — MOIC, IRR, and net proceeds at any exit valuation.

Venture returns are measured two ways: MOIC (Money-on-Money Multiple) — how many times you get your money back — and IRR (Internal Rate of Return) — your annualised return rate. A 10× MOIC over 7 years is roughly 39% IRR. The power law of venture means most returns come from 1–2 investments in a portfolio.

Total capital invested in the company

$

Investor ownership at time of exit (fully diluted)

%

Total acquisition price or IPO valuation

$

Years from investment to exit

VC fund fees (typically 2% annual + 20% carry)

%

The Formula

MOIC = (Exit × Ownership%) ÷ Investment. IRR = MOIC^(1/Years) − 1

In plain English

Gross proceeds = exit valuation × ownership %. MOIC = proceeds ÷ investment. IRR = MOIC^(1/years) − 1.

Worked Example

$1M invested, 15% ownership, $50M exit. Proceeds = $7.5M. MOIC = 7.5×. Over 5 years, IRR = 7.5^(1/5) − 1 = 49.6%.

How VCs Think About Returns

Venture capital follows a power law: a small number of investments generate the vast majority of returns. The top 10% of investments typically generate 90%+ of fund returns. This means VCs look for companies that could be 10× or 100× outcomes, not 2–3× outcomes.

For founders, understanding VC return expectations explains investor behaviour: they'd rather fund a company with a 10% chance of a 50× return than a company with a 90% chance of a 3× return. VCs need fund-returning outcomes; moderate successes don't move the needle.

3×

Minimum "success" for most VC funds

10×+

Fund-returning single investment threshold

25%

Target net IRR for top-quartile VC

7–10 yr

Typical venture holding period

Venture Return Benchmarks (2026)

MOICIRR (5 years)IRR (7 years)ClassificationStatus

< 1×

NegativeNegativeLoss

1–3×

< 25%< 17%Modest

3–10×

25–58%17–39%Strong

10×+

58%+39%+Exceptional

Source: Cambridge Associates Venture Benchmark 2025 · NVCA Yearbook 2025

Common Mistakes

⚠️

Confusing MOIC with IRR

A 5× MOIC over 1 year (400% IRR) is very different from 5× over 10 years (17% IRR). Always use both metrics together — MOIC tells you the absolute return, IRR tells you the time-adjusted return.

⚠️

Not accounting for dilution over holding period

Your ownership percentage at exit may be lower than at initial investment due to future funding rounds. Model dilution: a 20% initial stake might be 12% at exit after two subsequent rounds. This dramatically affects MOIC.

⚠️

Ignoring liquidation preferences

In low-exit scenarios, investor proceeds may be limited by the liquidation preference waterfall. A $10M exit with $15M in invested capital means investors don't recover their capital even at 1× preference.

Frequently Asked Questions

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