Does anyone have MOIC and IRR targets for investors?

by a searcher from Emory University

3 years ago

I'm putting together a model to determine the size of company I would like to purchase.  I'm wondering if anyone has any experience on what return investors are looking for with ETA type investments. Is there a good range and minimum investment size investors are looking to make?   

With the equity I can put down, I'm looking for a small investments of ~$50-150k from investors and trying to determine what's a reasonable assumption for how much equity they would want in a 650K SDE business.

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searcher from The University of North Carolina at Chapel Hill - Kenan-Flagler Business School

I think most investors look for worst case scenarios of 25% IRR, but ideally closer to 35% IRR with conservative assumptions.

1 month ago | like reply | 0 likes

investor from WU Vienna University of Economics and Business

I agree with Steve, 35% is usually threshold for the performance based tranche of the searcher's equity to vest. However the holding period is a critical aspect of this, I can say that for us a (somewhat) lower IRR, but a higher MOIC due to a longer holding period is preferred. Quick flips can look great on paper with high IRRs, but if I factor in our redeployment cost, they are usually not so great....

3 years ago | like reply | 0 likes

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