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Insights Venture capital

2 min read

Venture Funds Stopped Returning Cash. LPs Rewrote the Scorecard Around DPI.

Published June 23, 2026

Originally published on Allegory Capital.

TLDR: Distributions to paid-in has overtaken paper marks as the number limited partners trust, turning realised liquidity — secondaries, continuation funds, structured exits — into the discipline that decides who raises the next fund.

The marks were real. The cash was not.

TVPI (total value to paid-in) and IRR (internal rate of return) climbed through the 2021 boom, but a markup is an opinion and a pension fund cannot spend an opinion. Limited partners (LPs) now track DPI (distributions to paid-in), the cash a general partner (GP) has actually returned — what Carta’s Peter Walker calls “the metric that rules them all”. The median 2017 fund still held about 0.27x DPI in early 2025.

Liquidity is now a corporate-finance problem

Thin distributions push managers toward the corporate-finance toolkit: GP-led secondaries, continuation vehicles and structured exits, benchmarked through Institutional Limited Partners Association (ILPA) reporting templates across the US, EU and Switzerland. Manufacturing liquidity on a credible schedule is the new fundraising prerequisite.

References

Peter Walker / Carta, DPI is “the metric that rules them all.” https://carta.com/data/vc-dpi-2024/
Carta, VC Fund Performance, Q1 2025. https://carta.com/data/vc-fund-performance-q1-2025/

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