The variation is entirely due to the time element. A second investment round immediately prior to the sale of the company, which as a result generates a return almost immediately, can have a much higher IRR than and earlier investment, even if the earlier investment was at a much lower valuation and had a higher exit multiple. This illustrates the time element of the IRR calculation - finance theory punishes projects which tie up cash longer.
For more on IRR, check out our blog post:
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