---
title: "What Is DPI?"
term: "DPI"
description: "DPI (distributions to paid-in capital) measures how much cash a fund has returned to LPs relative to what LPs contributed—real money back, not paper gains."
date: 2026-07-25T00:00:00.000Z
updated: 2026-07-25T00:00:00.000Z
topics: ["fund-economics", "metrics"]
source: https://venturecapitaltracker.com/glossary/dpi
---

# What Is DPI?

> DPI (distributions to paid-in capital) measures how much cash a fund has returned to LPs relative to what LPs contributed—real money back, not paper gains.

**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](/glossary/distribution) — cash flowing to LPs
- TVPI and RVPI — total and unrealized multiples
- IRR — time-weighted return metric
- [Distribution in Kind](/glossary/distribution-in-kind) — stock distributions still count toward DPI

## FAQ

### What is DPI in simple terms?

Total distributions to LPs divided by total capital LPs paid into the fund. A DPI of 0.5 means LPs got back half of what they put in. A DPI above 1.0 means they received more than their contributed capital.

### Why does DPI matter?

TVPI can look strong on paper marks; DPI proves liquidity. LPs compare DPI across vintages and use it alongside IRR to assess GP performance before committing to the next fund.


---
Source: https://venturecapitaltracker.com/glossary/dpi