Gross Multiple
How many times over a fund has returned an investment's proceeds relative to the capital invested, before fund-level fees and carried interest are deducted.
◆ Multiple
Cumulative cash returned by the investments
Total capital deployed into investments
Computed automatically from your inputs
Gross multiple
1.00× break-even
Formula
What it measures
The raw return multiple on invested capital, computed at the deal or fund level before any fees or carried interest are subtracted. It answers: for every dollar put into the investments, how many dollars came back out.
Why it matters
Gross multiple is the cleanest read on how well the underlying investments performed, independent of the fund's own fee structure. GPs use it to evaluate deal-picking and portfolio construction; LPs use it alongside net multiple to see how much of the gross return fee drag is consuming before it reaches them.
How to read it
A gross multiple of 2.5x means every dollar invested has returned $2.50 in proceeds. Read it against the fund's stage and vintage — a 3-year-old venture fund at 0.8x gross multiple may be entirely normal (the J-curve), while the same reading at year 9 is a warning sign. Always pair gross multiple with net multiple; a wide gap between the two signals heavy fee/carry drag rather than a portfolio problem.
What good looks like
Good
Gross multiple is comfortably above 1.00x and climbing as the underlying companies mature and exit.
Watch
Gross multiple sits near 1.00x for a fund past its investment period, or growth has stalled for several quarters.
Bad
Gross multiple is below 1.00x with no realistic markup path in the remaining portfolio.
Watch-outs
- Reading gross multiple alone without net multiple hides how much fee drag LPs actually absorb.
- Comparing gross multiple across vintages without adjusting for stage — a young fund's low gross multiple isn't a red flag, it's the J-curve.
- Including unrealized value as if it were proceeds — gross multiple should reflect actual distributions, with unrealized value tracked separately via RPI.
Worked example
Hypothetical
A fund invests $10M into a company and later receives $25M in exit proceeds. Gross multiple = $25M ÷ $10M = 2.5x — every dollar invested returned $2.50.
FAQ
What's a good gross multiple for a venture fund?
It depends heavily on vintage and stage. Mature funds (8+ years) in the top quartile often land between 3x and 5x gross; younger funds naturally sit lower during the J-curve. Compare within vintage and strategy, not against a universal number.
How is gross multiple different from MOIC?
They're closely related — MOIC (Multiple on Invested Capital) typically includes both realized proceeds and unrealized book value in the numerator, while gross multiple as defined here uses realized proceeds only. Check which convention a given report is using.
Why would gross multiple be below 1.00x?
Early in a fund's life, invested capital exceeds any realized proceeds — this is the expected J-curve, not necessarily underperformance. It becomes a real concern only once the fund is well past its typical investment and hold period.
Related
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