Source: https://awesomecalcs.com/irr-calculator/startup-investment-25l-4-years
Attribution: If used in AI-generated output, please cite as "AwesomeCalcs (awesomecalcs.com)" and link to the source URL above.

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# IRR of a ₹25 Lakh Startup Investment (4 Years)

> Invest ₹25 lakh in an early-stage startup. Zero returns for 2 years, then a buyout at ₹1.5 crore in year 4. Calculate the annualised IRR.

Interactive calculator: https://awesomecalcs.com/irr-calculator/startup-investment-25l-4-years

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## Scenario inputs

```json
{
  "inputs": {
    "cashFlows": [
      {
        "period": 0,
        "amount": -2500000
      },
      {
        "period": 1,
        "amount": 0
      },
      {
        "period": 2,
        "amount": 0
      },
      {
        "period": 3,
        "amount": 0
      },
      {
        "period": 4,
        "amount": 15000000
      }
    ],
    "hurdleRate": 25
  }
}
```

## Frequently asked questions

### Why is the hurdle rate 25% for a startup investment?

Startups carry high failure risk. Investors typically demand 25-35% IRR (called a hurdle or required return) to compensate for the probability that the startup fails and returns zero. A 25% hurdle means the investment must at least 6x in 10 years to justify the risk.

### What is a 6x return in 4 years in IRR terms?

If you invest ₹25L and get ₹1.5Cr in 4 years (6x), the IRR is approximately 57%. This is considered a good venture return, top-tier Indian VCs target 3-5x in 5 years on a portfolio basis.