Finance term
TVPI (Total Value to Paid-In Capital)
Also known as: Total Value to Paid-In, TVPI multiple, fund TVPI
Definition
TVPI is a private fund performance metric that sums distributions already returned to investors plus the residual unrealized value of remaining holdings, divided by total capital called — the most comprehensive 'where-things-stand-today' multiple in private markets reporting.
Detailed explanation
TVPI = (Distributions to LPs + Residual NAV) / Paid-In Capital = DPI + RVPI. Breaking it down: DPI (Distributions to Paid-In) = cash already returned / capital invested; RVPI (Residual Value to Paid-In) = current mark-to-market value of unrealized holdings / capital invested. TVPI is the primary fund-level performance benchmark during a fund's life before full exit.
The Institutional Limited Partners Association (ILPA) — ilpa.org/reporting — standardizes TVPI, DPI, and RVPI reporting in its Reporting Template for fund quarterly reporting. The SEC's Investment Adviser Act (17 CFR Part 275, sec.gov) and AIFMD (for EU-domiciled funds) require disclosure of performance metrics including TVPI in fund communications. Cambridge Associates and Preqin use TVPI benchmarks in their private equity and venture capital databases to compare fund vintages.
For business owners raising institutional equity, understanding TVPI helps frame investor conversations: a GP with a fund currently at 1.2x TVPI two years in is tracking ahead of J-curve expectations; 0.9x TVPI three years in (underwater on paper) requires a strong story about unrealized portfolio value. TVPI below 1.0x means, on paper, LPs have less value today than they invested — the fund must generate meaningful gains to return capital with any profit.
◈ Worked example
- A VC fund called $100M from LPs. It has distributed $60M and the remaining portfolio is marked at $120M. TVPI = ($60M + $120M) / $100M = 1.8x. DPI = 0.6x; RVPI = 1.2x.
- A PE fund at year 8: DPI = 1.4x (returned 140% of invested capital), RVPI = 0.3x (remaining portfolio worth 30% of original capital). TVPI = 1.7x.
- J-curve: most funds have TVPI below 1.0x in years 1-3 due to fees + initial write-downs. TVPI typically crosses 1.0x by year 4-5 for median funds; top-quartile funds cross 1.0x sooner.
Common questions
The most-asked questions about TVPI (Total Value to Paid-In Capital) — answered straightforwardly.
What is the difference between TVPI, DPI, and RVPI? +
TVPI = DPI + RVPI. DPI (Distributions to Paid-In) measures what has actually been returned to investors as cash — the realized component. RVPI (Residual Value to Paid-In) measures the current marked value of unrealized holdings. TVPI combines both for a total picture. DPI is 'money in hand'; RVPI is 'money still at risk.'
Why is TVPI better than IRR for early-stage fund evaluation? +
IRR is highly sensitive to the timing of early cash flows and can be manipulated by subscription credit lines that delay capital calls. TVPI measures absolute multiple return independent of timing. For early-stage funds where most holdings are unrealized, TVPI combined with DPI gives a cleaner picture than IRR, which may be distorted by portfolio write-ups or the J-curve effect.
What TVPI is considered good for a VC fund? +
Top-quartile VC funds targeting a 10-year fund life typically aim for 3x+ net TVPI at maturity. At mid-life (year 5-6), top-quartile TVPI benchmarks are typically 1.5-2.0x. Median funds often deliver 1.5-2.0x net TVPI at maturity. DPI above 1.0x (returning all invested capital) is a critical milestone LPs track.
Further reading
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