Glossary
TVPI
Total Value to Paid-In Capital: realized gains plus unrealized portfolio value divided by capital invested.
By Amit Tyagi, Fitoor Capital · AletheiaAI Glossary
Definition
TVPI (Total Value to Paid-In Capital) is the primary benchmark for measuring fund performance. It divides the sum of cash returned to investors and current portfolio value by the total capital deployed, showing how many rupees of value exist for every rupee invested.
A TVPI of 1.5x means investors have received or hold assets worth ₹1.50 for every ₹1.00 deployed. This metric combines realized returns (money already returned) and unrealized gains (current portfolio valuations), making it the truest snapshot of fund health at any moment.
Unlike IRR, which measures time-weighted returns, TVPI is blind to duration. A fund that returned 2x in 2 years and a fund that returned 2x in 8 years both show 2x TVPI, but the IRR differs dramatically. This is why institutional LPs track both metrics together. TVPI of 2.0x+ is considered strong in Indian venture; 3.0x+ is exceptional.
India Context
Indian VC funds report TVPI quarterly to SEBI under Alternative Investment Fund (AIF) guidelines. Most Category II AIFs (venture funds) averaging 1.8–2.2x TVPI across a portfolio lifecycle are competitive. Top quartile funds—Accel, Sequoia India, Lightspeed—often reach 2.5x+ before exits conclude.
The metric became critical post-2015 when Indian LPs (family offices, pension boards, DFIs like SIDBI) demanded standardized reporting. Unlike the West, Indian GPs often face pressure to show TVPI growth within 5–6 years, not the traditional 10-year fund lifecycle, because domestic institutional capital is shorter-dated. Unrealized valuations in TVPI rely on recent funding rounds; as 2022–2023 showed, down rounds compress TVPI sharply, making the metric volatile in correction cycles.
Example
Sequoia India Fund III (₹1,500 crore fund launched 2018) reported a 2.8x TVPI by mid-2023. This meant investors had received or held ₹4,200 crore in total value across exits (Razorpay, PolicyBazaar) and live portfolio companies (Airbnb India partnerships, SaaS bets). When Razorpay exited at $7.5B (2023), that single holding's exit value was multiplied across the fund's basis, moving TVPI upward.
Conversely, a smaller emerging fund with 1.2x TVPI signals drawn capital is still deploying or early positions haven't matured—not necessarily failure, but a yellow flag if 4+ years have passed.
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