VC Metrics & Performance
What is TVPI and MOIC in venture capital?
TVPI (Total Value to Paid-In Capital) is the total value of a fund including unrealized gains. MOIC (Multiple on Invested Capital) is the gross investment multiple on a deal or fund.
TVPI and MOIC are two related metrics that measure investment performance in venture capital.
MOIC (Multiple on Invested Capital) is the simplest performance metric: how many times did you get back what you invested? If you invested $1M and got back $5M, your MOIC is 5x. MOIC ignores the time it took to generate those returns.
MOIC is typically used at the deal level: 'We made a 12x on our Stripe investment.' It's also used at the fund level to communicate headline returns.
TVPI (Total Value to Paid-In Capital) is the fund-level version of MOIC that includes both realized returns (exits) and unrealized value (current marks on portfolio companies). It represents the total value generated by the fund to date.
TVPI formula: (Residual Value + Distributions) / Paid-In Capital
TVPI of 1x = you're at breakeven (on paper) TVPI of 2.5x = strong fund performance TVPI of 4x+ = top-decile fund
The key distinction: TVPI includes unrealized marks, which are only estimates until a company actually exits. A fund can have a high TVPI but low DPI if its portfolio companies haven't had exits yet.
Benchmark context: Top-quartile VC funds target a net TVPI of 2.5x or higher over a 10-year fund life. Median funds come in around 1.5-2x net TVPI.
Related questions
What is IRR in venture capital?
IRR (Internal Rate of Return) is the annualized return on a VC investment, accounting for the timing of cash flows. Top-quartile VC funds target net IRRs above 20-25%.
What is DPI in venture capital?
DPI (Distributions to Paid-In Capital) measures how much cash a VC fund has actually returned to LPs relative to how much was invested. A DPI above 1x means LPs have gotten their money back.
What is "2 and 20" in venture capital?
"2 and 20" refers to the standard VC fee structure: a 2% annual management fee on committed capital, plus 20% carried interest on profits.