A distribution event usually looks like an acquisition or IPO. Say you invested $20,000 and the company is acquired for a price that values your stake at $120,000 — once the deal closes and proceeds clear, that $120,000 lands as a distribution. Sometimes distributions come in pieces: an acquisition might pay out part of the proceeds upfront and hold the rest in escrow for a year, or an earnout might pay additional amounts if the acquired company hits targets.
The reason experienced investors obsess over distributions is that everything else is just an estimate. A company can mark itself up on paper for years — your portfolio looks great in the dashboard — but until cash actually comes back, you haven't made a dollar. This is the gap between TVPI (which counts paper value) and DPI (which counts only cash returned). Early in a portfolio's life, distributions are usually zero while you wait through the long J-curve; the back half is where the realized returns finally show up.