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Truth. The early DPI you don’t really want. Every single investment you make should have the potential to at least return the fund So when you get an early exit, that’s one less chance to hit it big. https://t.co/b9ItQ7NkYJ
💡 Interesting counterpoint. For seed stage VC >0 DPI in early years is not necessarily indicative of success 🤔 https://t.co/LfJXT1tDEc
Have very mixed feelings these days on funds with dual venture and liquid mandates. Think it creates an inherent conflict w venture side. When DPI is the main metric against which you're evaluated, it becomes harder to justify private deals (esp moonshots) that wont return…
Recent discussions among venture capitalists highlight the complexities of using Distributed Profitability Index (DPI) as a metric for evaluating early-stage funds. Some investors argue that a DPI greater than zero in the first five years can be misleading, as it may indicate that a fund's investments are not performing optimally. Early exits, often resulting in lower returns, can hinder the potential for significant gains from future investments. The conversations suggest a growing concern about the reliance on DPI, particularly for seed funds, as it may not accurately reflect long-term success or the potential of investments that require more time to mature.