What is TVPI Ratio?
TVPI Ratio(Total Value to Paid-In Capital Ratio)
The TVPI Ratio is a venture performance metric measuring the total value (realized cash returns + paper value) relative to the capital paid in by investors.
Why It Matters for Startups
Directly dictates the cap table and dilution structure during fundraising; understanding TVPI Ratio helps founders model equity distributions when structuring rounds for fund performance reporting and marketing materials preparation.
Detailed Deep Dive
The TVPI Ratio measures the cumulative performance of a venture capital fund. It combines actual cash returned with remaining paper value to show the total return multiple.
Frequently Asked Questions
Q:What is the formula for the TVPI Ratio?
TVPI Ratio = (Realized Cash Distributions + Unrealized Paper Value) / Paid-In Capital.
Q:What is a strong TVPI for a VC fund?
A TVPI of 3.0x or higher is considered strong for a mature 10-year venture fund.
Quick Facts
- CategoryFunding
- Key ApplicationFund performance reporting and marketing materials preparation
Coverage Trend12 Weeks
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