IRR (Internal Rate of Return) benchmarks vary by stage, sector, and asset class. Here is what investors consider "good" across different contexts.
IRR benchmarks by context
| Context | Minimum acceptable IRR | Target IRR |
|---|---|---|
| Angel / pre-seed | 30% | 50–100%+ |
| Series A / VC | 25% | 40–60% |
| Growth equity | 20% | 30–40% |
| Private equity buyout | 15% | 20–30% |
| Real estate development | 12% | 18–25% |
| Public market hurdle | 8–12% | — |
IRR vs. MOIC
IRR is time-sensitive: a 3× return in 2 years = ~73% IRR; a 3× return in 6 years = ~20% IRR. MOIC (Multiple on Invested Capital) ignores time, so investors use both: - IRR to compare investments with different holding periods - MOIC to communicate magnitude of return to LPs
When IRR misleads
IRR assumes reinvestment at the same rate. For investments with large early cash flows (e.g. quick dividends), IRR overstates the blended return. Use MIRR (Modified IRR) when reinvestment rate differs materially from the project IRR.
Use the IRR calculator to compute IRR and NPV for any cash flow series.