Suppose you've invested $200,000 across your portfolio and, over time, exits have returned $300,000 in cash. Your DPI is 1.5x — for every dollar you put in, a dollar fifty has come back, and it's real money in your account, not a markup. A DPI above 1.0x means you've recouped your entire investment and everything beyond it is profit; below 1.0x means you're still waiting to get whole.
DPI is the metric that can't be gamed, which is why it's the truest scorecard late in a portfolio's life. The tradeoff is that it's brutally pessimistic early on — a three-year-old angel portfolio almost always shows a DPI near 0.0x, because companies haven't had time to exit yet. That's why investors pair it with TVPI: TVPI shows the full picture including paper gains, while DPI shows what's actually been realized. Watching the gap between them close over the years is watching paper value turn into cash.