An acceptable Internal Rate of Return (IRR) varies by industry, project risk, and cost of capital, but generally, it must exceed the company's Required Rate of Return (RRR) or cost of capital. Typical benchmarks range from 10-15% for moderate-risk projects to over 20-30%+ for high-risk ventures or private equity.
What's a Good IRR in Venture? According to research by Industry Ventures on historical venture returns, GPs should target an IRR of at least 30% when investing at the seed stage. Industry Ventures suggests targeting an IRR of 20% for later stages, given that those investments are generally less risky.
So the rule of thumb is that, for “double your money” scenarios, you take 100%, divide by the # of years, and then estimate the IRR as about 75-80% of that value. For example, if you double your money in 3 years, 100% / 3 = 33%. 75% of 33% is about 25%, which is the approximate IRR in this case.
What's considered a “good” IRR can vary based on the type of investment you're making. In general, many early-stage VC investors target a 30% net IRR, while many later-stage VC and growth equity PE investors target a net IRR of around 20% (both, over an average period of eight years).
There isn't a one-size-fits-all answer, but generally, an IRR of around 5% to 10% might be considered good for very low-risk investments, an IRR in the range of 10% to 15% is common for moderate-risk investments, and in investments with higher risk, such as early-stage startups, investors might look for an IRR higher ...
The 70/20/10 rule in investing refers to two main concepts: a personal budgeting guideline (70% spending, 20% saving/investing, 10% debt/giving) and a portfolio risk allocation (70% low-risk, 20% medium-risk, 10% high-risk), both designed to balance immediate needs with long-term growth and security. It's a flexible framework, adapting to rising costs, that helps manage money by prioritizing essentials, future wealth, and extra financial goals like debt reduction or charity.
The "7-3-2 Rule" refers to two main concepts: a financial strategy for wealth building, suggesting it takes 7 years for the first major savings milestone, 3 years for the next, and 2 years for the third, driven by compounding and increasing investments; and a trucking rule (7/3 split) allowing drivers to split their 10-hour mandatory break into 7 hours in the sleeper berth and 3 hours of off-duty rest, offering flexibility.
One quick way of checking that the calculated IRR is correct for a project is to insert the IRR % value answer as the minimum return % that is used to calculate the NPV.
ROI and IRR are two metrics that can help investors and businesses evaluate investments. IRR tends to be useful when budgeting capital for projects, while ROI is useful in determining the overall profitability of an investment expressed as a percentage.
The "7% rule" in real estate typically refers to a quick screening tool where an investor checks if a rental property's gross annual rent is at least 7% of its purchase price, indicating a potentially solid income investment, though it's not a substitute for detailed analysis; however, other "7 rules" exist, like those focusing on agent performance (top 7% of agents do most business) or key investment principles (due diligence, diversification, market awareness, clear strategy) for long-term success.
In general, many early-stage VC investors target a 30% net IRR, while many later-stage VC and growth equity PE investors target a net IRR of around 20% (both, over an average period of eight years). However, some investors aim for a higher IRR.
Return on Stocks: On average, an ROI of 7% after inflation is often considered good, based on the historical returns of the market. Return on Bonds: For bonds, a good ROI is typically around 4-6%. Return on Gold: For gold investments, an ROI of more than 5% is seen as favorable.
For example, a business with an annual revenue of $200,000 and a valuation multiple of 2.5 would have a value of $500,000. However, the accuracy of a revenue-based valuation relies heavily on selecting the right multiple for your business.
A common approach to estimating your business's value is the Earnings Multiple Method. Essentially this is Earnings times a multiple. For example, if a business earns $1 million per annum, and the multiple is 3 times, then the value is $3 million. This will then be adjusted to allow for Assets and working capital.
The vast majority of small and mid-sized companies are valued on a multiple of EBITDA. Some rules of thumb are: Companies under $250K in EBITDA = 1.5 – 2.5 X EBITDA. Companies $250k – $750k in EBITDA = 2 – 3.5 X EBITDA.
Your $500,000 can give you about $20,000 each year using the 4% rule, and it could last over 30 years. The Bureau of Labor Statistics shows retirees spend around $54,000 yearly. Smart investments can make your savings last longer.
Roughly 7% to 9% of American households have $500,000 or more in retirement savings, though figures vary slightly by source, with data from late 2025 suggesting around 7.2% and older 2022 data indicating about 9%, showing it's a significant milestone achieved by less than one in ten families, despite higher averages driven by wealthy individuals.