As an angel investor, understanding how to measure your investment performance is critical. Two of the most important metrics are MOIC (Multiple on Invested Capital) and IRR (Internal Rate of Return). While both measure returns, they tell different stories about your investment performance.
Quick Comparison
MOIC
Shows how much your money multiplied
Example: 3x MOIC = Your $100K is now worth $300K
IRR
Shows how fast your money grew annually
Example: 25% IRR = Your money grew 25% per year
What is MOIC (Multiple on Invested Capital)?
MOIC measures the total value returned relative to the capital invested. It's one of the simplest and most intuitive ways to measure investment performance.
MOIC Formula:
MOIC = Current Value / Amount Invested
Example:
You invested $50,000 in a startup. Today it's worth $150,000.
MOIC = $150,000 / $50,000 = 3.0x
Interpreting MOIC
- < 1.0xYou've lost money on the investment
- 1.0xBreak-even (got your money back)
- 2.0x - 3.0xGood return for angel investing
- 5.0x+Excellent return (top quartile)
- 10.0x+Home run investment
What is IRR (Internal Rate of Return)?
IRR measures the annualized rate of return, accounting for the time value of money. It tells you how quickly your investment grew on a yearly basis, making it useful for comparing investments held for different periods.
IRR Concept:
IRR is the discount rate that makes the net present value (NPV) of all cash flows equal to zero. In simpler terms, it's the compound annual growth rate of your investment.
Example:
You invested $50,000 in 2021. In 2026 (5 years later), it's worth $150,000.
IRR = (150,000 / 50,000)^(1/5) - 1 = 24.6%
Interpreting IRR
- < 0%Losing money each year
- 0% - 10%Below typical angel expectations
- 15% - 25%Good annual return
- 25% - 35%Excellent return
- 35%+Exceptional (top decile)
When to Use MOIC vs IRR
Use MOIC When:
- Communicating simple returns to others
- Evaluating total wealth creation
- Comparing investments at similar stages
- Time horizon is less important
Use IRR When:
- Comparing investments with different hold periods
- Evaluating opportunity cost of capital
- Time-weighted performance matters
- Comparing to other asset classes
Real-World Example: Same MOIC, Different IRR
Consider two investments, both with a 3x MOIC but very different IRRs:
| Metric | Investment A | Investment B |
|---|---|---|
| Amount Invested | $50,000 | $50,000 |
| Current Value | $150,000 | $150,000 |
| Hold Period | 3 years | 10 years |
| MOIC | 3.0x | 3.0x |
| IRR | 44.2% | 11.6% |
Key Takeaway: Investment A achieved the same multiple in one-third the time, making it significantly more efficient from an IRR perspective. That capital could have been reinvested sooner.
Best Practices for Angel Investors
Track Both Metrics
MOIC and IRR together give you a complete picture of performance. MOIC shows absolute returns, IRR shows efficiency.
Use Portfolio-Level Metrics
Individual investment metrics can be misleading. Evaluate your entire portfolio's MOIC and IRR to understand overall performance.
Account for Write-Offs
Include failed investments (0x MOIC) in your calculations. They're part of your real returns.
Be Realistic About Unrealized Gains
Estimated values for active investments can be optimistic. Focus on DPI (actual cash returned) alongside TVPI.
Calculate MOIC & IRR Automatically
Stop wrestling with spreadsheet formulas. AngelHub calculates MOIC, IRR, and other performance metrics automatically for your entire portfolio.
Get Started FreeLast updated: January 10, 2026