The “how much” metrics that tell you whether a fund’s returns are real, and whether any cash has actually hit your pocket.
In my last post we unpacked IRR (Internal Rate of Return), the time-weighted metric that tells you the annualized growth rate of your capital. It’s powerful, but it has quirks: a fund that returns money early can look impressive on IRR even when the actual multiple is modest.
That’s where today’s metrics shine. Multiple of Invested Capital (MOIC), Total Value to Paid-In Capital (TVPI), and Distributions to Paid-In Capital (DPI) answer the simpler, more intuitive question: “How many times did my money come back?”
Calculate Your Return
They’re the multiples everyone quotes in PE and VC decks. Because they’re so tightly connected, I’m covering all three in one post rather than splitting them up. They’re best understood together, just as I suggested in the IRR piece. Think of this as Part 2 in a short series on the core performance metrics LPs actually care about.
Use this simple calculator to compare MOIC, TVPI, and DPI.
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Capital invested
$
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Distributions
$
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Residual value (NAV)
$
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Units
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MOIC
2.30x
Total value / invested
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TVPI
2.30x
Distrib. + NAV / paid-in
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DPI
1.40x
Cash returned / paid-in
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RVPI
0.90x
Unrealized / paid-in
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Quick Refresher on the Building Blocks
Before the formulas, a few terms you’ll see everywhere:
- Paid-In Capital (or “capital called”): The actual money investors have wired into the fund so far.
- Distributions: Cash the fund has actually returned to investors, covering realized gains and returned capital.
- Residual Value (or Net Asset Value / NAV): The current fair-market value of investments still sitting in the fund, i.e., paper gains.
These three metrics slice and dice those numbers in slightly different ways.
1. Distributions to Paid-In Capital (DPI)
DPI is the cash-is-king metric. It only counts money that has actually hit your bank account.
Formula:
DPI = Distributions ÷ Paid-In Capital
A DPI of 1.0× means you have gotten all your original capital back. Anything above 1.0× is pure profit already in your pocket.
Realistic example for a 10-year fund:
Metric | Calculation | Result |
Paid-In Capital | — | $100 million |
Distributions | — | $140 million |
Residual Value | — | $90 million |
DPI | 140 / 100 | 1.4× |
RVPI | 90 / 100 | 0.9× |
TVPI | 1.4 + 0.9 | 2.3× |
Even though the fund is only halfway through its life on paper, LPs are already in strong shape: they’ve recouped their capital plus 40% in cash and still own assets worth 90% of what they put in.
2. Multiple of Invested Capital (MOIC)
MOIC is the broadest, simplest multiple. It answers: “For every dollar I put in, how many dollars of value do I have today, realized plus unrealized?”
It is most often calculated gross (before fees and carried interest) at the individual investment or portfolio level, though net versions exist.
Formula:
MOIC = Total Value (Distributed + Residual) ÷ Capital Invested
Example:
You invest $10 million in a startup. Three years later the company sells for $28 million and you receive your $10M back plus $18M profit.
MOIC = 28 ÷ 10 = 2.8×
You turned every dollar into $2.80.
3. Total Value to Paid-In Capital (TVPI)
TVPI is the fund-level version of MOIC that LPs obsess over. It is almost always shown net of fees and carry, and it uses Paid-In Capital in the denominator rather than committed capital.
It tells you the total value, cash already in your pocket plus current paper value, per dollar you have actually paid in.
Formula:
TVPI = (Distributions + Residual Value) ÷ Paid-In Capital
TVPI = DPI + RVPI
(RVPI, Residual Value to Paid-In Capital, is the unrealized portion.)
TVPI is also the sum of two sub-metrics you’ll meet below. Early in a fund’s life, TVPI can sit at 0.8× even when the underlying companies are performing well, because the manager hasn’t called all the capital or exited anything yet. Late in the fund’s life, TVPI and MOIC usually converge.
How These Multiples Compare to IRR (and Why You Need Both)
Metric | What it measures | Time-sensitive? | Best used for | Typical “good” range (VC/PE) |
IRR | Annualized rate of return | Yes (very) | Comparing speed of returns | 15–30%+ |
MOIC | Gross total value / invested | No | Early deal-level decisions | 2–5× |
TVPI | Net total value / paid-in | No | Overall fund health | 1.5–3×+ |
DPI | Cash returned / paid-in | No | Liquidity & realized profits | >1.0× by year 7–8 |
A few rules of thumb most LPs lean on:
- A great fund delivers high IRR and high TVPI/DPI together.
- “J-curve” funds can show low or negative IRR early while TVPI is already climbing.
- A 3× MOIC in 3 years is almost always better than a 3× MOIC in 10 years; that’s where IRR keeps you honest.
Pros and Cons of the Multiples
Pros
- Intuitive: “2.5×” is easier to grasp than “28% IRR.”
- Not distorted by timing quirks.
- DPI shows you actual cash you can reinvest or spend.
Cons
- Ignores time value of money; a 3× in year 3 beats a 3× in year 12.
- Residual Value is an estimate until the last exit.
- Early DPI is almost always low, and that’s normal.
Bottom Line for Investors and GPs
Use IRR to understand velocity. Use MOIC, TVPI, and DPI to understand magnitude and liquidity. The best funds deliver strong multiples and attractive IRRs. When you see a deck that shows only one or the other, ask for both.
If you’re an LP evaluating funds, track how quickly DPI climbs and whether TVPI is still growing in the later years. If you’re a GP raising your next fund, a historical TVPI of 2.5× or better with solid DPI will make LPs’ eyes light up faster than almost any IRR number alone.