Cash-on-cash return (CoC) is a metric used to measure the profitability of an investment, specifically in real estate and venture capital (VC) funding. It represents the amount of cash that an investor receives in relation to the amount of cash invested.
In the context of VC funding, the CoC return is calculated by dividing the cash returned to the investor by the amount of cash invested. This metric gives investors an idea of how much cash they can expect to receive in relation to the amount they invested, and it helps them to compare the returns of different investments.
For example, if an investor invested $100,000 in a startup and received $120,000 in cash return, the CoC return would be 20%. This metric is useful to compare different investment options, but should not be used alone, as it doesn't take into account the time of the investment, the growth of the company, or other important factors.