Comparison
TVPI vs DPI: Key Differences Explained
TVPI (Total Value to Paid-In) measures a fund's total value including unrealized portfolio holdings; DPI (Distributions to Paid-In) measures only cash actually returned to LPs. TVPI tells you what the fund is worth on paper; DPI tells you what LPs have actually received in their bank accounts.
What is TVPI?
TVPI (Total Value to Paid-In) is the total value of a fund — both realized and unrealized — divided by the capital LPs have paid in. It includes distributions already made plus the current fair market value of remaining portfolio holdings.
Formula: TVPI = (Distributions + Remaining Portfolio Value) / Paid-In Capital
A TVPI of 2.5x means the fund is worth 2.5 times what LPs invested, counting both cash returned and paper value of remaining companies. TVPI is the most comprehensive measure of fund performance — but unrealized value is just an estimate, and estimates can be wrong.
Example: A fund has paid in $100M. It has distributed $80M and holds portfolio companies marked at $120M. TVPI = ($80M + $120M) / $100M = 2.0x.
What is DPI?
DPI (Distributions to Paid-In) measures only the cash a fund has actually returned to LPs — real money distributed, not paper value. It's the most conservative and reliable fund performance metric.
Formula: DPI = Total Distributions / Paid-In Capital
A DPI of 1.0x means the fund has returned LPs their money back. A DPI above 1.0x means LPs are in profit. DPI below 1.0x means the fund hasn't yet returned all invested capital.
DPI is often called the 'realness' metric — TVPI can be inflated by optimistic markups, but DPI cannot be faked. Early in a fund's life, DPI is near zero. Strong funds build DPI over time as portfolio companies exit.
Example: A fund has distributed $150M against $100M paid-in capital. DPI = 1.5x — LPs have gotten 50% more than they invested, in cash.
Key Differences
| Feature | TVPI | DPI |
|---|---|---|
| What it counts | Realized distributions + unrealized portfolio value | Only realized distributions — cash returned to LPs |
| Formula | (Distributions + Portfolio FMV) / Paid-In Capital | Distributions / Paid-In Capital |
| Reliability | Less reliable — unrealized value is estimated | Highly reliable — actual cash received |
| Early in fund life | More informative — shows paper value of investments | Near zero — few exits have occurred |
| Late in fund life | TVPI and DPI converge as holdings are realized | Most critical — shows how much cash LPs actually received |
| Can be gamed? | Yes — aggressive markups inflate TVPI artificially | No — distributions are auditable cash events |
| LP focus | Used to benchmark active funds mid-life | The ultimate performance verdict for a fund |
When Founders Choose TVPI
- →Evaluating a fund that is mid-life with significant unrealized portfolio value
- →Benchmarking a fund against peers in the same vintage year
- →Assessing a GP's portfolio construction and marking discipline
- →Comparing TVPI across a GP's fund sequence to spot trends
When Founders Choose DPI
- →Evaluating whether a fund has actually made money — not just on paper
- →Comparing fund performance at maturity or end of life
- →Assessing how much liquidity LPs have received relative to capital committed
- →Determining whether to re-up with a GP — DPI shows historical cash return discipline
Example Scenario
Two funds each raised $200M in 2018. Fund A has a 3.2x TVPI in 2025 — but DPI of only 0.4x. Most of the value is tied up in two companies marked at high valuations, one of which is struggling. Fund B has a 2.4x TVPI — but DPI of 1.8x. The LPs have already received $360M in cash.
Which fund performed better? Most LPs would prefer Fund B: the cash is real. Fund A's 3.2x TVPI could evaporate if those marked companies don't exit at their current valuations.
Common Mistakes
- 1Trusting TVPI late in a fund's life without scrutinizing the underlying markups — paper gains can reverse
- 2Dismissing a fund with low TVPI early in its life — it takes years for J-curve to recover
- 3Comparing TVPI across different vintage years without adjusting for market conditions
- 4Ignoring the RVPI (Residual Value to Paid-In) component — this shows how much value is still locked in unrealized holdings
- 5Assuming DPI = 0 means a fund is failing — young funds always have low DPI
Which Matters More for Early-Stage Startups?
DPI is the ultimate metric because it represents real, auditable cash. But for active funds with significant unrealized value, TVPI provides essential context. The smartest LPs track both together: TVPI shows potential; DPI confirms delivery. A fund with strong TVPI and growing DPI is the ideal — value is being created and progressively realized.