Hurdle rate

1. Generally the required rate of return (IRR) in a discounted cash flow analysis, above which an investment makes sense and below which it does not. It is also called required rate of return. For example, if a project has an expected rate of return greater than the hurdle rate, the project will be accepted. 2. With venture capital: the basic return before managers can claim their carried interest. Often hurdles set are based on a return on government bonds or one of the leading stock market indexes.