DPI (distributions to paid-in capital) answers a blunt question: how much cash has this fund actually returned to LPs compared with what LPs paid in?

How it works

The formula is straightforward:

DPI = cumulative distributions to LPs ÷ cumulative paid-in capital (PIC)

If LPs contributed $100M and the fund has distributed $40M, DPI = 0.40. If distributions reach $120M, DPI = 1.20—LPs have more than their money back before considering any remaining unrealized value.

DPI pairs with RVPI (residual value to paid-in) and TVPI (total value to paid-in). TVPI ≈ DPI + RVPI. A fund can show TVPI of 2.0 with DPI of 0.1 if marks are high but exits are scarce—common in young vintages.

Mature buyout funds often target DPI above 1.0 by year eight to ten. Venture funds may stay low-DPI longer because hold periods and IPO lockups delay distributions.

Why it matters

• LPs: DPI is the ultimate proof of performance. High TVPI with zero DPI is a paper story until exits land. Allocators watch DPI pace when deciding re-ups.
• GPs: Strong DPI helps fundraising for Fund II and beyond. GPs may accelerate exits, push secondaries, or use dividend recaps to improve DPI optics—each with tradeoffs.
• Founders: Less direct, but a GP under DPI pressure may push portfolio companies toward earlier exits or secondary liquidity.

Common mistake

Judging a five-year-old venture fund harshly for low DPI. Early DPI is naturally low; the error is ignoring DPI entirely and funding GPs who never distribute despite aging portfolios.

Related ideas

• Distribution — cash flowing to LPs
• TVPI and RVPI — total and unrealized multiples
• IRR — time-weighted return metric
• Distribution in Kind — stock distributions still count toward DPI