---
title: "Multiple on Invested Capital"
url: "https://mahouse.world/glossary/multiple-on-invested-capital"
type: "glossary term"
topic: "Performance measurement"
author: "Ihor Vlasov"
reviewed: "2026-09-20"
published: "2026-08-10"
---

# Multiple on Invested Capital

The multiple on invested capital is the total value returned or held divided by the capital invested — a 2.5× means every euro in became two and a half. It ignores time, which is its limit and its honesty: a multiple cannot be flattered by a subscription line or an early exit, so investors read it beside the IRR. Its variants split the multiple into cash already back (DPI), value still held (RVPI) and the two together (TVPI).

**Also known as:** MOIC, Money multiple, TVPI, Multiple of money

## Key facts

- **Used at:** fund reporting to LPs (TVPI, DPI, RVPI on paid-in capital), deal returns (gross MOIC), sponsors' investment cases (a 2.5–3× target), and carried-interest waterfalls
- **Binding:** no — a calculation; but the LPA's waterfall is computed on the cash multiples, and "DPI" is the number LPs increasingly demand before re-upping
- **Typical levels:** a good buy-out fund returns 2–2.5× net; top venture funds 3× or more, with a long tail of funds below 1×; a single venture winner may be 20–50×
- **Typical reading:** TVPI is the fund's claim, DPI is the proof; a fund at 2.4× TVPI and 0.6× DPI in year seven is a fund whose returns are mostly marks
- **Parties:** GPs, LPs and the benchmark providers; sponsors modelling deals; founders reading a fund's website

## How the multiple works in practice

An LP paid €40m into a fund over its life. At year seven the fund has distributed €36m in cash and holds companies it values at €58m. DPI: €36m ÷ €40m = 0.9× — the LP has not yet got its money back in cash. RVPI: €58m ÷ €40m = 1.45× — what is still held, at the manager's marks. TVPI: 2.35× — the claim. By year ten, if the marks hold, DPI reaches 2.3× and RVPI falls to near zero; if the marks were generous, DPI ends at 1.8× and the TVPI of year seven was a story.

The multiple and the IRR answer different questions. A 2× in three years is a 26% IRR and a 2× in eight years is a 9% IRR; the LP received the same money and the fund earned very different rates. Sponsors targeting a 20% IRR prefer the fast 2×; LPs paying fees on committed capital for ten years want the 3× however long it takes — which is why fund terms and sponsor incentives are negotiated around both. The pair together — "2.4× and 19%" — is the honest description of a fund, and either alone is half of one.

Since 2022, with exits slow and marks under question, DPI has become the LP's first question: the multiple that has actually been paid.

## Example

A €500m fund at year seven: paid-in €460m, distributed €410m, residual value €640m. DPI 0.89×, RVPI 1.39×, TVPI 2.28×; net IRR 17%. Its GP is raising the next fund on "2.3× and 17%". An LP's diligence separates the multiple: €410m of the distributions came from four exits at an average 2.9×; the residual €640m sits in nine companies, three of them marked at 2021 round prices. The LP haircuts the unrealised marks by 25% — TVPI 1.9× — and asks the GP which of the nine will be sold in the next two years. It re-ups at half its previous commitment, and tells the GP that the next conversation will start with DPI.

## Common mistakes

- Reading TVPI as money made; it is money made plus the manager's opinion of the rest.
- Ignoring the timing entirely — a 2× over twelve years lost to the public market.
- Sponsors modelling a deal on IRR alone and choosing the fast, small multiple over the slow, large one.
- Comparing gross deal multiples with net fund multiples.
- Marks that hold a residual value the next round or the next sale will not.

## Related terms

- [Internal Rate of Return](https://mahouse.world/glossary/internal-rate-of-return.md)
- [Carried Interest](https://mahouse.world/glossary/carried-interest.md)
- [J-Curve](https://mahouse.world/glossary/j-curve.md)
- [Limited Partner](https://mahouse.world/glossary/limited-partner.md)
- [Net Asset Value](https://mahouse.world/glossary/net-asset-value.md)
- [Private Equity](https://mahouse.world/glossary/private-equity.md)

— Ihor Vlasov, M&A FinTech Expert. Last reviewed 2026-09-20. https://mahouse.world/authors/ihor-vlasov