DPI
Distribution to Paid-In Capital
Definition
DPI (Distribution to Paid-In) measures the amount of cash returned to limited partners divided by the amount of capital they invested. DPI of 1.0x means LPs received their money back; 2.0x means they doubled their investment.
In Simple Terms
DPI answers: "If I gave you $1M, how much cash did I get back?" A 1.5x DPI means for every $1 you invested, you got $1.50 back in cash. It's a "cash in hand" metric, not including unrealized gains.
Why It Matters
DPI is the ultimate test of fund performance—actual cash returns, not paper gains. VCs with high DPI (like a16z's crypto fund) have proven they can return real money to investors. LPs prioritize funds with strong DPI track records.
Example
Fund invested $20M total, has returned $35M in cash to LPs. DPI = $35M / $20M = 1.75x. LPs got 75% more cash back than they invested, not counting remaining portfolio value.