DPI
Also known as Distributions to Paid-In, Cash-on-Cash, Realization Multiple
DPI (distributions to paid-in capital) is cash actually returned to limited partners divided by capital they contributed. It is the only fund multiple that represents realized money rather than paper marks.
Formula
DPI = Cumulative Distributions / Paid-In Capital- Cumulative Distributions
- Total cash and securities distributed to LPs to date
- Paid-In Capital
- Total capital LPs have contributed via capital calls to date
In depth
Until a fund exits positions and distributes proceeds, DPI is zero, regardless of how strong the paper marks look. LPs increasingly prioritize DPI over TVPI because the 2021 vintage exposed how quickly unrealized markdowns can swallow paper gains. A fund with 2.5x TVPI and 0.3x DPI eight years into its life is a warning sign, not a win.
Why it matters
TVPI can be flattering during bull markets when unrealized marks balloon. DPI answers a narrower question: how much money has actually come back? For LP commitments to follow-on funds, DPI history is the single most predictive metric of GP discipline.
Worked example
A fund called $50M from LPs and has distributed $75M back via exits and secondaries:
DPI = $75M / $50M = 1.5x
If the remaining portfolio is marked at $100M, RVPI = 2.0x and TVPI = 3.5x. The fund has already returned the entire fund and is now generating profit for LPs in cash.
Frequently asked
When does a venture fund typically reach 1.0x DPI?
Most venture funds cross 1.0x DPI (fund returned) in years 7-10. Top-quartile funds may hit 1.0x by year 6; below-median funds may never reach it. Secondaries have shifted some of this earlier.
Why are LPs focused on DPI now more than before?
After the 2021-2022 markdown cycle, many LPs realized paper TVPI evaporated without distributions to back it up. LPs increasingly underwrite GP track records on net DPI by fund vintage, not TVPI at peak.
How is DPI different from cash-on-cash?
In venture, the terms are largely interchangeable. Cash-on-cash is more common in real estate and private equity; DPI is the standard term in institutional LP reporting.