Private Markets

Private-Market IRR

Definition

What is Private-Market IRR?

The internal rate of return calculated from the timing of private-fund contributions and distributions.

Example in practice

Earlier cash returns increase IRR even when the final multiple is unchanged.

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Investment in privately held companies, often with active ownership and a multi-year exit plan.

Equity financing for young, high-growth companies with substantial uncertainty.

An individual who invests personal money in early-stage companies.

A preliminary document outlining the main commercial terms of a proposed investment.

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