What is DPI Ratio?
DPI Ratio(Distribution to Paid-In Capital Ratio)
The DPI Ratio is a venture performance metric measuring the actual cash returns distributed to a fund's investors relative to the total capital they paid in.
Why It Matters for Startups
Directly dictates the cap table and dilution structure during fundraising; understanding DPI Ratio helps founders model equity distributions when structuring rounds for venture fund track record evaluation and marketing.
Detailed Deep Dive
The DPI Ratio measures actual cash returned to investors. For limited partners, DPI is the ultimate measure of fund success, focusing on realized gains rather than paper valuations.
Frequently Asked Questions
Q:What is the formula for the DPI Ratio?
DPI Ratio = Realized Cash Distributions / Paid-In Capital.
Q:Why is the DPI ratio the ultimate metric for LPs?
Because it measures actual cash returned, whereas TVPI and RVPI rely on paper valuations.
Quick Facts
- CategoryFunding
- Key ApplicationVenture fund track record evaluation and marketing
Coverage Trend12 Weeks
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