Metrics & Performance
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Quick Answer
Distributions to Paid-In — the ratio of cash actually returned to LPs versus capital contributed, measuring realized (not paper) returns.
Distributions to Paid-In Capital
DPI = Cumulative Distributions / Paid-In Capital
Where
DPI (Distributions to Paid-In) measures cumulative cash distributions returned to limited partners relative to the total capital they've contributed to the fund. Formula: DPI = Cumulative Distributions / Paid-In Capital. A DPI of 1.0x means LPs have received back exactly what they invested; above 1.0x means they're in profit. DPI is considered the 'gold standard' of fund performance metrics because it counts only actual cash returned — not unrealized paper gains that may never materialize. The VC industry saying 'you can't eat TVPI' reflects the primacy of DPI. Top-quartile VC funds typically achieve 2-3x DPI by fund maturity.
What good looks like
Why It Matters
DPI is the metric LPs care about most when evaluating fund managers for re-investment. A fund can report impressive TVPI (total value including unrealized), but if DPI is low, LPs haven't actually received cash. When choosing between managers, experienced LPs weight DPI heavily — it's the only metric that represents real money back in their pocket.
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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 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 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.
This concept is especially relevant for these venture capital roles:
DPI (Distributions to Paid-In) measures cumulative cash distributions returned to limited partners relative to the total capital they've contributed to the fund. Formula: DPI = Cumulative Distributions / Paid-In Capital. A DPI of 1.0x means LPs have received back exactly what they invested; above 1.
Understanding DPI is critical for founders navigating the fundraising process. It directly impacts deal terms, valuation, and the relationship between founders and investors.
DPI falls under the metrics category in venture capital. This area covers concepts related to the quantitative measures used to evaluate fund and company performance.
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