Multiple on invested capital
Total value returned divided by the money invested.
A deal that returned three dollars for every dollar invested has a 3.0x MOIC. It ignores time, so it is usually shown next to IRR.
MOIC is usually quoted at deal level and gross of fees, while TVPI describes the whole fund from the LP's side, net of fees and carry. A fund's gross MOIC will therefore look higher than its net TVPI.
LPs look at the spread of deal multiples as well as the average. A portfolio where one company returned 20x and the rest lost money tells a different story about repeatability than one with many 3x outcomes.
Worked example
A fund invested $4M in a company across two rounds and later sold its stake for $14M. The deal MOIC is $14M divided by $4M, or 3.5x. If the company were still held and valued at $14M, the MOIC would also be 3.5x but unrealised.
Common questions about MOIC
What is the difference between MOIC and TVPI?
MOIC is usually a deal level or gross measure of value over invested capital. TVPI is a fund level measure from the LP's perspective, dividing distributions plus remaining value by capital paid in, normally net of fees and carry.
Does MOIC account for time?
No. A 3x return over two years and over ten years have the same MOIC, which is why it is shown alongside IRR.