Realization Multiple


DEFINITION of 'Realization Multiple'

A private equity measurement that values the return paid to an investor. The multiple is named after the amount of return that is realized. The realization multiple is found by dividing the cumulative distributions from a project by the paid-in capital.

Realization Multiple

BREAKING DOWN 'Realization Multiple'

This method of valuing a project is often used by venture capitalists, and provides a return which can be compared across investment projects. The time value of money is ignored under this approach, which differentiates the realization multiple from other valuation methods, such as internal rate of return or net present value.

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  2. Net Present Value - NPV

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  3. Time Value of Money - TVM

    The idea that money available at the present time is worth more ...
  4. Venture Capital

    Money provided by investors to startup firms and small businesses ...
  5. Private Equity

    Private Equity is equity capital that is not quoted on a public ...
  6. Paid In Capital

    The amount of capital "paid in" by investors during common or ...
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