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What is Internal Rate of Return (IRR)

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May 03, 2023
What is Internal Rate of Return (IRR)
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Accepted Answer
May 03, 2023
A standard financial measurement used for investments - based on cash flows. For benchmark, good real-estate investments return 8-11%, upper-quartile VC funds (after 7-10 years) achieve IRR averaging 20% (but with standard deviation of 30!) Note that measuring IRR only makes sense after investments have exited, a single large return will drive all of the fund stats (and make everyone happy). See Power Law.

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