The short answer
DPI is cash returned to LPs as a multiple of what they paid in. RVPI is the remaining value of the fund's holdings as a multiple of what they paid in. TVPI is the two added together: total value over paid-in capital.
The definitions
| Metric | Formula | What it tells you |
|---|---|---|
| Paid-in capital | Total capital called from LPs | The base every multiple is measured against |
| DPI | Cumulative distributions ÷ paid-in capital | Realized return: cash actually returned |
| RVPI | Residual value of holdings ÷ paid-in capital | Unrealized value still held, at the fund's marks |
| TVPI | DPI + RVPI | Total value created so far, realized and unrealized |
A worked example
Imagine a fund that has called $50M from its LPs, distributed $10M back, and holds investments currently valued at $60M. These numbers are illustrative.
- DPI = $10M ÷ $50M = 0.20x
- RVPI = $60M ÷ $50M = 1.20x
- TVPI = 0.20x + 1.20x = 1.40x
The fund looks 1.4x on paper, but only 0.2x of that has been returned as cash. Both facts are true, and an LP deserves to see both.
Why TVPI alone is not enough
TVPI includes unrealized value, and that depends on how the fund marks its holdings. Two funds with the same TVPI can be very different: one may have returned a large share in cash, while the other is carrying the same value in private marks that have not been tested by a sale. DPI is the number that cannot be argued with, which is why LPs watch it closely as a fund matures.
The J-curve
Early in a fund's life, fees are charged and investments are held at cost, so TVPI often sits below 1.0x. DPI is typically near zero for years. A low early figure is normal, and what matters is the trajectory, so report these multiples over time rather than as a single snapshot.
Mistakes that distort the numbers
- Mixing gross and net. LP-level multiples are normally net of fees and carry, while a deal-level multiple is usually gross. Label which one you are showing.
- Inconsistent paid-in capital. If called capital is counted differently from one report to the next, every multiple moves for the wrong reason. Compute it from one ledger of calls.
- Stale marks. RVPI is only as current as the valuations behind it. State the valuation date and policy.
- Ignoring recycling. If a fund recalls distributed capital, the definitions of paid-in and distributed need to say how that is treated.
- Reporting TVPI without DPI. Show the realized part next to the total.
DPI and TVPI versus IRR
Multiples ignore timing: a 2.0x return in four years and a 2.0x return in twelve years look identical. IRR accounts for when cash moved, so LPs usually want both. Multiples are the clearest way to see how much has come back, and IRR shows how fast.
How VentureFract calculates these
In VentureFract, a fund's DPI and TVPI are computed from the capital calls and distributions you record for that vehicle, and from the marks on your portfolio positions, so the figures LPs see reconcile to the same ledger. See funds and LP reporting.
This guide is educational and not financial or legal advice. Definitions and reporting conventions vary by fund agreement.