IRR calculator for startup investments
IRR is the yearly return that allows for timing. For one investment and one exit it is MOIC to the power of 1 ÷ years, minus 1.
The formula
IRR = MOIC to the power of 1 ÷ years, less 1
Worked example: 22.9% a year
The example uses the guide's seed round, £200,000 for 20%, with a matching cap table, exit, fund and market.
- MOIC 2.80x over 5 years
- 2.80 ^ (1 ÷ 5) − 1 = 22.9%
Try it with your numbers
Work out your IRR
It starts on the example. Replace any figure with your own; nothing you type leaves your browser.
Your IRR
22.9%
a year
- MOIC 2.80x over 5 years
- 2.80 ^ (1 ÷ 5) − 1 = 22.9%
- One payment in and one out. Follow-on cheques or part sales need a full cash-flow IRR.
Formula: MOIC to the power of 1 ÷ years, less 1.
- MOIC
- 2.80x
Everything your numbers show
27 of 27 worked out so far. Select one for its page.
- Valuation£1,000,000post-money
- Pre-money valuation£800,000
- Post-money valuation£1,000,000
- Equity20.0%Equity sold
- Dilution70.0%kept by existing shareholders, down from 100.0%
- Option pool142,857new pool shares
- Fully diluted60.0%Fully diluted ownership
- SAFE89,286shares
- Loan note96,429shares
- Pro rata rights£200,000Pro rata amount
- Liquidation preference£1,000,000to the investor
- Vesting180,000after 18 months
- Cliff120,000at month 12
- SEIS£10,000SEIS relief
- EIS£6,000EIS relief
- VCT£4,000VCT relief
- TAM£240,000,000a year
- SAM£60,000,000a year
- SOM£3,000,000a year
- Down roundDown round
- Up roundDown round
- Flat roundDown round
- MOIC2.80x
- IRR22.9%a year
- TVPI1.50x
- DPI0.40x
- Dry powder£24,000,000
How to read your result
Funds look at IRR alongside MOIC, because money returned sooner can be invested again.
Watch out for
This version assumes one cheque in and one payment out. Follow-on cheques need a full cash-flow IRR.
Last checked . Estimates only, not financial, tax or legal advice: check your accounts and documents, and take advice before you act. More terms in the startup glossary.