When you start investing in startups, you’ll encounter a handful of metrics that sound like alphabet soup: DPI, MOIC, TVPI, markups, multiples, and more. Each of these tells you something different about how your investments are performing. Let’s break down what DPI means, how it compares to MOIC, and why these numbers matter to angel investors and fund LPs.
What is DPI?
DPI stands for Distributions to Paid-In. It’s a simple ratio: the amount of cash (or stock) a fund has actually returned to you, divided by the amount you originally put in. If you’re an LP in a venture fund, DPI tells you how much real money you’ve gotten back so far. For example, if you invested $100,000 in a fund and have received $50,000 back in distributions, your DPI is 0.5x.
DPI only counts actual distributions—money or shares that have been sent to you. It doesn’t care about paper gains, portfolio company valuations, or unrealized investments. In other words, DPI is the “show me the money” number.
MOIC and Multiples Explained
MOIC stands for Multiple on Invested Capital. It’s another way to measure performance and includes both realized and unrealized gains. MOIC is calculated as the current value of your investment (including both distributions and any remaining portfolio value), divided by what you put in. If you’ve received $50,000 in distributions and your remaining investments are worth $70,000, your MOIC is ($50,000 + $70,000) / $100,000 = 1.2x.
Multiples like DPI and MOIC are often used together. DPI focuses on money in your pocket, while MOIC tells you the total value—including what’s still to come.
Markups vs. Realized Returns
In early-stage investing, most of your portfolio’s value may be on paper, not in cash. A markup happens when a portfolio company raises a new round at a higher valuation, boosting your reported value. These markups can improve your MOIC but don’t impact DPI until there’s an actual exit or distribution.
It’s important to understand the difference: DPI is money you’ve actually received; markups are potential gains that depend on future exits. The startup world is full of markups that never turn into cash, so DPI is often the figure investors care about most over the long run.
Why These Metrics Matter
For angel investors and LPs, tracking DPI and MOIC helps you understand both the real performance and the potential upside of your investments. High markups can look great on paper, but DPI is the only number you can spend (or brag about at dinner).
If you’re managing your own direct angel investments, you’ll want to pay attention to both multiples and distributions over time, especially as you consider de-risking after a big win or rebalancing your portfolio.
In early-stage investing, it’s easy to get distracted by paper gains and big markups. At the end of the day, DPI is the scoreboard—because you can’t pay the bills with unrealized returns, no matter how impressive they look in a spreadsheet.