Private Equity
IRR
Internal Rate of Return. The annualized return a PE fund generates on the capital it puts to work.
Definition
The discount rate that makes the net present value of a fund's cash flows equal to zero. IRR is highly sensitive to time, so anything that compresses the value creation timeline, including AI-driven efficiency, directly improves IRR.
Why it matters
AI initiatives that deliver in 90 days instead of 18 months are not just faster, they materially change the fund's reported return.
Where Sophizo applies this
Sophizo deploys IRR inside revenue and AI engagements with growth-stage operators and PE-backed portfolios.
See Private Equity →Related terms in Private Equity
EBITDA
Earnings Before Interest, Taxes, Depreciation, and Amortization. The core profitability metric private equity uses to value companies.
TVPI
Total Value to Paid-In. The total value a fund has created, realized plus unrealized, divided by the capital LPs have contributed.
DPI
Distributions to Paid-In. Cash actually returned to limited partners, divided by the capital they contributed.
GP
General Partner. The private equity firm itself, the entity that raises and manages the fund and makes investment decisions.
From vocabulary to outcomes
Ready to put IRR to work?
Knowing the term is step one. Deploying it inside a revenue architecture that compounds is what Sophizo builds.
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