The TVPI definition is one line: total value to paid-in, where total value is what the fund has returned to investors plus what it still holds, and paid-in is what investors have actually paid in so far. A TVPI of one means the fund is, on paper, worth what it has called; above one it has created value, below one it has lost it. This page gives the definition, works it on this site's own investor update worksheet, shows how it splits into the two multiples that always add up to it, and explains what moves a venture fund's TVPI from one quarterly letter to the next.
The definition, and the worked figure
TVPI is distributions to date plus residual value, divided by paid-in capital. On the worked example a fund has distributed two million six hundred thousand dollars and holds nine million four hundred and twenty-five thousand of residual value, a total value of twelve million twenty-five thousand, against six and a half million paid in: a TVPI of one point eight five times. The worksheet prints it as one hundred and eighty-five cents of total value per dollar paid in, which is the same figure without a decimal. Paid-in is what was called and received, fees included, not the commitment.
DPI plus RVPI equals TVPI, always
DPI is distributions over paid-in, what has actually gone back: zero point four zero on the example. RVPI is residual value over paid-in, what is still held at its carried value: one point four five. Add them and you have TVPI, one point eight five, and that identity is the first check an investor makes on a letter. A young fund's TVPI is almost all RVPI, because nothing has been realised; a fund near the end of its life has a TVPI that is almost all DPI. The split says how much of the multiple is cash and how much is opinion.
What moves TVPI in venture capital, quarter to quarter
Three things. A capital call raises paid-in and, until the money is invested and marked, lowers TVPI, which is why a fund's TVPI often dips early. A distribution moves value from RVPI to DPI and leaves TVPI unchanged on the day, since the same dollars move from one numerator to the other. A change in residual value, a markup at a new financing round or a write-down, moves RVPI and therefore TVPI without any cash moving, and in venture capital this is most of the movement, because the holdings are unlisted and their value is the fund's own valuation under its policy.
Net and gross, and what a letter should say
TVPI computed with paid-in including fees and distributions net of carry is the net multiple, what the investor actually experiences, and it is the one an LP letter should carry. Gross TVPI, before fees and carry, is higher and is the one a fund may quote about its investments rather than its investors. The worksheet computes whichever figures are entered; the letter should say which it is, and this site publishes no benchmark against which to judge either.
Questions people ask about tvpi definition
Is TVPI the same as MOIC?
Close, and the difference is on this site's MOIC page. MOIC is usually quoted on invested capital, deal by deal or gross; TVPI is on paid-in capital, at the fund level, and includes fees in the denominator when reported net.
Why can TVPI fall when nothing was sold?
A write-down of a holding lowers residual value and therefore RVPI; a capital call raises paid-in before the money is put to work. Neither involves a sale.
What TVPI is good?
This site does not say, because a multiple is only readable against the fund's age and strategy, and publishing a benchmark here would be quoting a figure this site did not measure. The sources below are where funds and their investors take the comparison.