DPI (Distributions to Paid-In Capital)
A fund performance metric measuring actual cash returned to investors relative to capital they've contributed.
DPI measures realized returns: it's the ratio of cash (or stock) actually distributed to LPs divided by the total capital they've paid into the fund so far. A DPI of 1.0x means LPs have gotten back exactly what they put in; above 1.0x means the fund has returned real profit, not just paper gains.
DPI is considered the most honest venture fund metric because it strips out unrealized markups on paper — a fund can show an impressive TVPI driven by inflated valuations on companies that never actually exit, while DPI only counts money that has genuinely come back to investors.
Because venture funds take 8-12+ years to fully realize returns, DPI is naturally low early in a fund's life and only becomes a meaningful signal in years 6 and beyond, once real exits have had time to happen.
For founders, DPI matters indirectly but a lot: GPs raise their next fund on the strength of realized returns from prior funds, and a manager with strong DPI has fresh capital to lead new rounds and support follow-ons. When you evaluate an investor's track record, DPI tells you whether their wins were real or just paper.
DPI can include stock distributions as well as cash. When a fund distributes public shares after an IPO instead of selling them, those shares count toward DPI at their distributed value even though the LP still carries market risk until they sell — which is why sophisticated LPs ask whether a fund's DPI was built on cash exits or in-kind stock.
DPI also drives LP behavior at the portfolio level. When distributions slow across the industry, LPs get less cash back to recycle into new fund commitments, which tightens fundraising for GPs even when their own numbers look respectable — and tends to concentrate new commitments with the managers LPs already trust most.
DPI = cumulative distributions to LPs / total paid-in capitalLPs have contributed $40M total to a fund so far, and the fund has distributed $30M in cash and stock from exits to date. DPI = $30M / $40M = 0.75x — meaning LPs have received 75% of their contributed capital back, with more presumably to come from remaining unrealized positions.
Ask any GP raising a new fund for their prior funds' DPI by vintage year, not just TVPI or IRR — a fund manager with strong TVPI but weak DPI several years into a fund's life is a real signal worth probing.
What's a good DPI for a venture fund?
It depends heavily on fund age — DPI near zero is normal in years 1-4, while a mature 10+ year fund returning below 1.5-2x DPI is generally considered underwhelming for top-quartile venture performance.
Why is DPI considered more reliable than TVPI?
Because DPI only counts cash actually returned to investors, while TVPI includes unrealized paper markups on companies that haven't exited yet and could still decline in value.
Why is DPI called the metric that can't lie?
Because it only counts cash or stock actually delivered to LPs. A fund can mark its private holdings at generous valuations to flatter TVPI, but DPI requires real liquidity events — acquisitions, IPOs, or secondary sales. Paper gains can be revised down; distributions can't be taken back.
Can a fund have high TVPI but low DPI?
Yes, and that gap is exactly what experienced LPs interrogate. A fund at 3.0x TVPI and 0.5x DPI is saying five-sixths of its reported value is still unrealized. In a young fund that's expected; in a mature fund it suggests markups that may never turn into cash.
Is DPI measured before or after carried interest?
DPI is measured from the LP's side: distributions LPs actually received, after fees and carry, divided by what LPs paid in. That makes it the return the LP actually experienced, which is why LPs anchor on it.
Related terms
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