Residual Value to Paid-in-Capital (RVPI)

Residual Value to Paid-in-Capital (RVPI) is residual value divided by capital (Residual Value/Paid-In-Capital). This terms tell us of how much money has been made through investments. RVPI is of use to venture capital firms and investors investing into VC funds.You can also use this ratio to evaluate your own investments. The formula for RVPI is Residual value divided by paid-in-capital (Residual Value/Paid-In-Capital). Roughly, Paid-In-Capital is the total value of investments or contibutions made, while Residual Value is the current value of all remaining investments within a fund to date. In calcualting RVPI, you consider all capital investments, including those that are yet to reach an exit. When used togther with DPI, RVPI provides more insight. With DPI alone, one can tell about the health of a fund to date. But when you add RVPI to your analysis of DPI, you can also make predictions about how good the fund will be in the future. This is because one can make assesments of the likely payout if the fund gets to exit as it had planned, all business it has invested in.If I was to make a loose comparison with stock trading, RVPI is of value (caution:not approximate or similar) to an investor or VC firm as Net Asset Value (NAV) is to a stock trader.

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