Internal Rate of Return (IRR)

Definizione

IRR is the annualized rate of return an investment produces, accounting for the timing of cash flows. It is one of the two headline metrics funds report to LPs, alongside MOIC.

Come si presenta nel fundraising

IRR rewards speed: an early exit at a modest multiple can show a high IRR, while a long-held big multiple can show a modest one.

Domande frequenti

What is the difference between IRR and MOIC?

MOIC measures how many times the money multiplied, ignoring time; IRR annualizes the return, making timing central.

What IRR do venture funds target?

Top-quartile venture funds have historically aimed for net IRRs in the 20 percent-plus range, though results vary widely by vintage.

Risorse Round Funded

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