Formula
How to Calculate DPI
Distributions to Paid-In Capital — the ratio of cash actually returned to LPs divided by the capital they invested. The only VC performance metric based on realized, distributed cash.
Distributions to Paid-In Capital
DPI = Cumulative Distributions / Paid-In Capital
Where
- Distributions
- = Total cash returned to LPs
- Paid-In Capital
- = Total capital called from LPs
What Is DPI?
DPI (Distributions to Paid-In Capital) measures the ratio of actual cash and stock distributions returned to limited partners relative to the capital they invested. It is the most important performance metric for mature VC funds because it reflects realized returns rather than paper markups. A DPI of 1.0x means LPs have received back exactly what they put in. A DPI of 2.0x means they've received twice their investment. A DPI of 0x means nothing has been distributed — all value is still on paper (unrealized). DPI is the counterpart to RVPI (Residual Value to Paid-In Capital), which measures unrealized portfolio value. Together, DPI + RVPI = TVPI.
Worked Example
A $100M fund has called $80M of committed capital. It has distributed $120M to LPs through exits and IPO liquidations. DPI = $120M / $80M = 1.5x. The fund still holds positions valued at $60M on paper. RVPI = $60M / $80M = 0.75x. TVPI = DPI + RVPI = 1.5x + 0.75x = 2.25x. The 1.5x DPI is the figure LPs trust most — it's cash in hand.
Why DPI Matters
DPI is the most credible signal of a fund manager's ability to generate real returns. Early in a fund's life, DPI is low (investments haven't exited yet). As the fund matures, LPs expect DPI to grow. A fund with high TVPI but low DPI has promising paper gains but hasn't proven it can actually exit positions. Top-quartile funds often have DPI of 2x+ by the end of their 10-year life.
Related Terms
Frequently Asked Questions
How do you calculate DPI?
DPI is calculated using the formula: DPI = Cumulative Distributions / Paid-In Capital. Distributions to Paid-In Capital — the ratio of cash actually returned to LPs divided by the capital they invested. The only VC performance metric based on realized, distributed cash.
What is a good DPI?
What constitutes a "good" DPI depends on context — the fund's stage, vintage year, and strategy. Check our benchmarks and calculators for specific ranges.