Metrics & Performance
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Quick Answer
Total Value to Paid-In capital before deducting management fees and carried interest, showing the fund's raw investment performance multiplier.
Gross TVPI (Total Value to Paid-In) is a fund performance metric that measures the total value created by the fund's investments relative to the total capital invested, before deducting management fees, carried interest, and fund expenses. It is calculated as (Total Distributions + Remaining NAV) / Total Capital Invested in portfolio companies. Gross TVPI shows the raw investment performance of the GP's deal selection and portfolio management skills without the reduction from fees and carry. A gross TVPI of 3.0x means the fund's investments have generated three times the capital deployed into portfolio companies. Gross TVPI is always higher than net TVPI (which deducts fees and carry), and the spread between gross and net indicates the total cost of the fund structure to LPs. Typical spreads are 30-50% at the 3x gross level, meaning a 3x gross fund might deliver 2.0-2.1x net to LPs. GPs often report gross TVPI to highlight their investment performance, while LPs focus on net TVPI as the actual return they receive.
In Practice
A fund invested $70 million into 25 portfolio companies (the remaining $30 million of the $100 million fund went to fees and expenses). The portfolio has distributed $100 million and has $110 million in remaining NAV. Gross TVPI = ($100M + $110M) / $70M = 3.0x. After deducting $30 million in cumulative management fees and $32 million in carried interest, net TVPI = ($100M + $110M - $30M - $32M) / $100M = 1.48x. The significant gap between 3.0x gross and 1.48x net illustrates the impact of fund economics on LP returns.
Why It Matters
Gross TVPI is the purest measure of a GP's investment skill, but it is not what LPs actually receive. Sophisticated LPs always evaluate net returns, not gross returns. A GP touting a 3x gross TVPI may be delivering mediocre net returns once fees and carry are deducted. Always ask for net figures when evaluating fund performance.
VC Beast Take
Here's what LPs won't tell you: gross TVPI can be misleading early in a fund's life when distributions haven't started flowing. A 3x gross TVPI in year two means nothing if it's all paper gains from mark-ups. Smart LPs focus on DPI (actual distributions) and track gross TVPI trends over multiple vintage years to separate skill from market timing.
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Gross TVPI (Total Value to Paid-In) is a fund performance metric that measures the total value created by the fund's investments relative to the total capital invested, before deducting management fees, carried interest, and fund expenses.
Understanding Gross TVPI is critical for founders navigating the fundraising process. It directly impacts deal terms, valuation, and the relationship between founders and investors.
Gross TVPI 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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