Venture Capitalists Turn to Novel Methods to Return Cash

In 2022, not long after the window for initial public offerings slammed shut, European early-stage investment firm Speedinvest hired someone who informally began using a wonky new job title. The firm’s self-styled “head of DPI” is in charge of making sure the distributed to paid-in capital ratio—a measurement of the cash the firm has returned to investors—is as strong as possible.

While venture capital firms have long paid attention to their DPI, the metric has become increasingly important. That’s because the limited partners who put money into VC funds have grown tired of waiting for the startups those funds invested in to go public. Many of those LPs want to see cash from their VC investments by any means necessary, and they are less dazzled than they once were by other measurements of venture fund performance that emphasize paper gains.