Author: Shmuel Bornstein

This guest post was written by Shmuel Bornstein, a Business Development and Finance Associate at OurCrowd. Shmuel focuses on the secondary financing of OurCrowd’s portfolio companies. ——- With access to increasing investment opportunities spanning global markets and asset classes, it is no wonder that many investors feel overwhelmed by their choices. One of the challenges of navigating the decision waters of where to invest is the seeming inability to compare between different opportunities; what does the risk-reward profile of an Australian REIT have to do with a 10-year US government backed bond? To overcome this, the financial world has engineered tools that allow comparing oranges and apples—the IRR being a staple. What is the Internal Rate of Return (IRR)? Here’s the technical definition. Bear with me. The internal rate of return on an investment is the annualized effective compounded return rate that makes the net present value of all cash flows (both positive and negative) from a particular investment equal to zero. It can also be defined as the discount rate at which the present value of all future cash flows are equal to...