DPI (Distributions to Paid-In)

The ratio of cash returned to LPs relative to total capital they invested; the realized return.

Definition

DPI measures how much cash a fund has actually returned to its LPs relative to the capital they invested. A DPI of 1.0x means LPs have gotten their money back; 2.0x means they have doubled their investment in actual cash. DPI only counts realized returns (actual cash distributions), not unrealized paper gains. It is the most conservative and honest measure of fund performance.

Why it matters

DPI is the metric that matters most because it counts only real cash, not paper valuations. A fund might show a 5x TVPI on paper, but if DPI is only 0.3x, LPs have received very little actual money back. This distinction affects VC fundraising and therefore the broader startup ecosystem.

Example

A fund called $200M in capital from LPs. It has distributed $150M in cash (from IPOs and acquisitions of portfolio companies). DPI is 0.75x. Still unrealized: the portfolio includes stakes worth $300M on paper, bringing TVPI to 2.25x.

Related terms

TVPI (Total Value to Paid-In)

The ratio of total fund value (realized + unrealized) to capital invested; includes paper gains.

MOIC (Multiple on Invested Capital)

The simple multiple of how much an investment returned relative to the amount invested.

IRR (Internal Rate of Return)

The annualized rate of return on an investment, accounting for the timing of cash flows.

Carried Interest (Carry)

The GP's share of fund profits, typically 20%, which is their primary compensation incentive.

General Partner (GP)

The managing partner(s) of a VC fund who make investment decisions and manage the portfolio.

Limited Partner (LP)

An investor who provides capital to a VC fund but has no management role.

More from Fund Mechanics

This definition is an educational summary. It is not legal, tax, or investment advice. Specific terms in your equity grant or company documents may differ.