DPI

“And we're working for DPI, and the bigger we make the fund, the tougher it is on the DPI.”

“I just think we don't think about the velocity of cash enough, and what I mean by that is like, you know, yes, there might be another double, but if I have to wait five years, and then the IPO, and then an 18 month lockup, Jesus, give me 50% of that now, and I…”

“I speak to a lot of LPs now, and do you know what, honestly, we can say what we want. They've gone back to wanting TVPI. They've gone back to wanting big numbers. And yes, they want DPI, of course, they always want DPI. But they are still very impressed by TVP…”

“One of the effects of the DPI problem in the broader industry is not just on LPs. It's also on investors, right? And you think about VP, principal, MD, even partner level investors who've been at firms for a while and haven't seen their carry paid out. There a…”

“Marks are opinions. DPI is math.”

“Because of that, I think there is, I would say too much focus even, but understandably on DPI, and where, you know, people hardly talked about it three years ago, and now some LPs, oh, it's just DPI. It's just DPI. We don't believe anything.”

“We're fortunate that, that we don't need to fundraise and we don't really have too much of a portfolio construction overlay, right? Is that we care about financial returns, but you know, our treasurer is not coming to my team, sort of pounding the table for DP…”

“For the first three funds, you know, there's no DPI. And then you return a shitload of DPI, and then LPs go, mm, but are they really hungry anymore? Cause they've made a lot of money.”

“Even the best funds in the world haven't, haven't had much DPI for four or five years.”

“I think what we're going to find is that, you know, a, The market, most of those funds are going away because they don't have that and they're not going to be.”

“I believe I believe that, like, DPI is the most important thing, and marks are completely for suckers.”

“And we've often said that the GPs who are selling good assets, probably at a low valuation just to get the DPI up, that's a red flag.”

“In fact, the word DPI itself is, is relatively new, you know, as a term, it was used for the first time on September 1320, 22. In a press release that the government of India gave to announce what would be the focus areas for G-Twenty”

“They think every open source project is a DPI. They think every government tech is DPI, which is not true. Some government tech is DPI. If it enables private entrepreneurship or private innovation to happen on type on top, some open sources DPI. And all DPI is…”

“We get a little bit of a chance. We go from being the underdog to the top dog, and we think everything is sorted out. And this is our problem even, even in DPI. And so it's very, very important that we maintain an underdog mindset.”

“If I take a hundred regulators, I would say only about 20, 30 of them have a good understanding of this. Another 20, 30 have heard of it, but they don't have a very good understanding and 20, 30 have not even heard of it.”

“We do well with the technology architecture, you know, protocols and platforms and how to think about them. I would say we get an A there. We do pretty poorly B minus for the regulatory architecture on top of that. We do our ecosystem building organizations, w…”

“There's a lot of these, a lot of businesses, a lot of great businesses out there, and a lot of, like, stock founders, and there's more and more of them, and increasingly a lot more VCs who realize that, like, you know there is a severe lack of DPI, especially …”

“Gross IRR is, is all well and good, but eventually, you know, you can only eat the DPI and that's kind of, that's what the, you know, that's what the capital allocators are starting to demand.”

“DPI is an output variable Siddharth. We don't really measure ourselves on the on the output that's for our LPs to do. That's for the market to do. We measure ourselves on our ability to attract the best entrepreneurs to ourselves. So, and we try to measure tha…”

“LPs as well as GPS. We have all realized that all numbers are good, but there's only one number that eventually matters. And that is DPI, right?”

“You have to produce basically a one X DPI in whatever fund you're in that they've invested in to get them to invest in the next fund. It doesn't matter how well it's shaping up versus the vintage. It doesn't matter if it's top core, top top decile. It doesn't …”

“We were meeting with a very large LP today who summarily said to this we have a lot of data on this and we can definitively say that the venture capitalists that are tweeting the most are not the ones producing the DPI.”

“I've heard like, I think it was Roger Enberg defined it as any fund that's returned one X DPI on all capital they've raised to date. And so you stop Being in an emerging manager, when you actually return every single dollar you've raised, you distribute back t…”

“No longer do you walk into a pitch meeting and show your multiple and invested capital and, or even like TVPI, like you have to like, just show DPI and be really clear what that number is.”

“I think that DPI could be dead.”

“Fund, our Fund Three is a 20 18 vintage. No DPI yet.”

“I think there's maybe an over Emphasis on DPI, and that is probably, you know, if this ever makes it on the air, it's, I'm probably gonna get all sorts of angry phone calls and emails and letters, but I just think that that's not the whole story, but it seems …”

“Like this Carta report is kind of content marketing nonsense because these funds are just too young to have any meaningful metrics or DPI in the first place.”

“They analyzed 71 funds from vintage years, oh five to oh eight. And they found that the correlation between year five DPI and current DPI was just 0.22.”

“Like, again, they're just like, I think most of the seed venture funds that exist today will not exist in a few years because to the point we're talking about, there's like, there's no DPI and people's appetite to fund these things because they under think of …”

“AUM is a game of politics for losers. DPI is the game of winners. That's how it works. So you can coast by being a political AUM person for a while, but you have nothing to be proud of because all you are is a salesman of stories versus someone who delivers re…”

“Typically 2.8 to three puts you in the top quartile on depending on the vintage and some vintages, it may not, some vintages, it may put you in the top decile.”

“If you're waiting around and just judging what people have done on a realized basis or in DPI, you're not going to have a good sense for the momentum in those managers, and you'll probably wait too long to eventually pick A really interesting up and coming gro…”

“Southeast Asia is still earlier on its journey and has not actually, in my opinion, shown as much from a realization DPI standpoint. I think that will improve.”

“What's kind of crazy about VC is that you don't really know until fund four. Why is that? Because you typically are raising in two, three year increments. So you don't really know. You don't really have DPI until let's say fund three. So you don't know. You do…”

“So I think DPI is important. And DPI is kind of like ground truth. Like it's an equalizer. You could be the worst marketer in the world, but eventually like your DPI will catch up. Right? So it is a great equalizer is the most empirical fact, but it is a highl…”

“I think you sell 10, 10, 15, 20%. A lot of LGPs get short-term greedy. They're like, well, I wanted to let it ride and get more carry. Well, first of all, I could go down to zero. But secondly, if they're really thinking, you know, strategically, that DPI will…”

“On balance, I don't think reserves and follow ons, I think it actually hurts seed investing and it hurts seed investing in two ways. One is it depresses DPI.”

“We had a 15% DPI. We got to that point where some small exits had happened.”

“The chasm between TVPI and DPI will be the biggest in venture history.”

“The only other time that would be equivalent would be about 99 and 2000, and I don't know if there is the volume of funds in the market then, so, and absolute numbers, he's probably right.”

“I think the numbers will tell you if you ask different LPs, if you can get three or four funds in a row with strong DPI, that is world class.”

“I would bet the last few years will be one of the biggest disconnects between TVPI and DPI for venture funds in venture history.”

“The last fund was the easiest to raise. So that was the fifth fund. ... Yeah. Yeah. It was a DPI story.”

“So people see a fund or two where not only do you have good TVPI, but you've got good DPI, and all of a sudden people are subscribing to your strategy. So it's really a strategy that moves over decades versus moving over years.”

“I think around liquidity is probably the biggest whereby, especially I think in the next years it'll be really prominent, which is whereby you have a venture funds with not a lot of DPI. And they know that they need DPI more than ever to raise their next funds…”

“Showing DPI is going to become more and more important. Mostly because LPs will struggle to evaluate what true TVPI is”

“On the re-ups, from what I understand, and I speak to a lot of LPs, if you had the chance to produce DPI last year, and you didn't, you're in the bad books.”

“I think if you've got the right LPs, they've seen enough in this business to understand that generating DPI through pressure isn't the best long-term outcome for the, for them and for the GPs. And then existing LPs have more data to evaluate progress and under…”

“With regards to track record, in the past, TVPI or paper markups, they were enough. Now, there is a much greater focus on DPI, which is returned capital to investors.”

“It is not in the interest of the founder for you, the lead seed VC, to sell your position at this time, but It is in your interest because you need to provide DPI to your investors. Very common right now. Core misalignment between founder and VC.”

“The number one metric that matters is DPI, which is the ratio of distributions to paid in capital. And it's basically money in versus money out, right? At the end of the day, that's all that matters is how much money did you put in the fund? How much money did…”