Glossary
Institutional definitions for venture fund metrics, accounting, and portfolio analysis — the vocabulary a strong fund CFO expects.
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15 of 15 terms
- PerformanceLP / GP
DPI (Distributed to Paid-In)
Cash and stock returned to LPs divided by paid-in capital — the primary measure of realized return.
- PerformanceLP / GP
TVPI (Total Value to Paid-In)
Sum of distributions plus residual NAV, divided by paid-in capital — total fund value on a paid-in basis.
- Performance
RVPI (Residual Value to Paid-In)
Remaining unrealized portfolio value (NAV attributable to investments) divided by paid-in capital.
- PerformanceAccounting
IRR (Internal Rate of Return)
Annualized discount rate that sets the net present value of all fund cash flows to zero.
- AccountingFund structure
NAV (Net Asset Value)
Value of fund assets minus liabilities — the fund’s net position at a point in time.
- Capital activityLP / GPLegal & compliance
Capital call (drawdown)
GP request for LPs to fund their committed capital — legally binding under the LPA.
- Fund structureLP / GP
Committed capital
Total amount LPs and the GP have contractually promised to fund over the life of the fund.
- Fund structureLP / GPLegal & compliance
Carried interest (carry)
GP’s share of fund profits after LPs receive preferred return and catch-up per the waterfall.
- Fund structureLegal & complianceLP / GP
Preferred return (hurdle rate)
Minimum annual return to LPs before carry is allocated to the GP, per the LPA.
- Fund structureLegal & complianceLP / GP
Distribution waterfall
Contractual ordering rules that allocate proceeds among LPs, GP, and carried interest.
- Fund structureAccountingCapital activity
Management fee
Periodic fee paid to the GP for managing the fund — usually a percentage of commitments or invested capital per the LPA.
- AccountingLP / GP
LP capital account
Running record of each LP’s contributions, allocations, distributions, and remaining stake in the fund.
- PerformanceFund structure
J-curve
Typical early pattern of negative net cash flows after fees and investments, before distributions lift performance.
- PortfolioFund structure
Dilution
Reduction in ownership percentage as new shares are issued in later financing rounds.
- AccountingLegal & compliance
Fund audit
Independent examination of fund financial statements under GAAP or IFRS, as applicable.