What Is Investor Lifetime Value (ILV)?
Investor Lifetime Value (ILV)
Investor Lifetime Value (ILV) estimates the total value an investor may contribute throughout the duration of their relationship with a fund manager, sponsor, or investment organization.
Formula
Total Expected Capital Contributions + Referrals + Future Participation Value = Investor Lifetime Value (ILV)
Investor Lifetime Value expands the traditional concept of customer lifetime value into the world of investor acquisition.
Many firms focus exclusively on the first investment made by an investor.
However, long-term investor relationships often create significantly greater value.
An investor may:
- Participate in multiple offerings
- Increase allocation sizes
- Refer additional investors
- Strengthen community credibility
- Support future fundraising efforts
ILV helps organizations recognize the long-term value of relationship development and investor retention.
This perspective encourages investment in trust-building, communication, investor education, and relationship management.
For many organizations, the lifetime value of a trusted investor relationship far exceeds the value of any single transaction.
Related AIAS metrics
- Investor Relationship Retention Rate (IRRR) , measures the strength of the existing investor base.
- Repeat Investment Rate (RIR) , measures the strength of the existing investor base.
- Investor Relationship Maturity Score (IRMS) , measures the strength of the existing investor base.
- Relationship Capital Index (RCI) , measures the strength of the existing investor base.
Related AIAS phase: Phase 6: Investor Relationship and Retention