DPI pressure: how funds create distributions without a full exit

Why DPI is the number LPs keep asking about

DPI, distributions to paid-in capital, measures the cash a fund has actually returned against the capital LPs have contributed. Unlike TVPI or IRR, a mark-up cannot lift it, which is why LPs lean on it when exits slow and why it now shapes fundraising conversations.

The backdrop is well documented. Bain's Global Private Equity Report 2026 found that distributions as a percentage of NAV have stayed below 15% for four years, and counted about 32,000 unsold companies worth $3.8 trillion. When full exits are scarce, GPs and operating partners look at every other route to cash.

Ways to create distributions without a full exit

The continuation route raises its own planning questions, covered in continuation fund value creation. Carve-outs often leave the sold business on a transition services agreement, and what happens to data when a TSA ends explains the records side of that exit.

What data licensing can and cannot do for DPI

It can produce a one-time cash payment at the company level from records the company already holds, without dilution and without selling the business. The company keeps ownership, approves the scope and price, and signs only if the terms work.

It cannot stand in for an exit. Four facts keep the pitch honest:

1. The money goes to the company first. The license payment is made to the portfolio company, not the fund. Whether any of it moves up depends on the board, the credit agreement's limits on distributions and the company's own needs.
2. The timing is uncertain. Nothing is paid until a buyer selects the data and pays. Once a company is deal-ready, buyers typically respond within about two weeks, and payment typically arrives within about 60 days of invoicing.
3. It happens once. Treat proceeds as non-recurring; keep them out of run-rate EBITDA and out of any valuation.
4. Not every company qualifies. Size, history, system breadth and rights decide it, one company at a time.

Used well, licensing cash can fund priorities the company would otherwise borrow for, such as debt paydown or an add-on, which can matter to returns as much as a distribution does.

The cash-path screen for the portfolio

Ask four questions per company at the next portfolio review. A company needs a yes on all four to count toward a DPI plan.

• Records: 50+ full-time employees at peak (contractors excluded), several years of documented operations and 10-15+ systems, some with archives.
• Rights: the company created the records, and client contracts, employee notices and privacy policies allow licensing.
• Sponsor: the CEO, CFO or owner would sign an exclusive AI-training license for an agreed term.
• Path: counsel and lenders confirm the proceeds could be distributed, or the board has a clear use for them inside the company.

Companies that pass the first three questions but not the fourth are still worth introducing for company-level value; just leave them out of the DPI count. The who qualifies page sets out the company criteria in full.

Illustrative: the screen across one portfolio

Illustrative and fictional. A fund holds eight companies, and the operating team runs the cash-path screen at the annual review. Three pass the Records question: a 180-person IT services firm, a 90-person engineering consultancy and a 300-person distributor. The consultancy fails Rights because most of its drawings belong to clients. The distributor passes Rights and Sponsor, but its credit agreement restricts distributions, so it fails Path; its board earmarks any proceeds for debt paydown. The IT services firm passes all four.

The result: two introductions, one company counted toward the DPI plan, and no amount or date modeled for either. A screen run this way keeps the DPI plan honest.

When to raise it in the fund calendar

What to say to a portfolio CEO

The introduction email builder drafts an introduction the CEO can approve before it is sent.

How the introduction and payment work

The operating partner submits the company through a referral link or the referral form and shares only basic fit facts. SourceX qualifies the company, the company completes its own data inventory, and price and terms are agreed before AI labs and data buyers review anything. After signing, the company prepares and delivers the data under redaction rules agreed in advance and receives a single all-in payment. Neither the fund nor the operating team handles the records at any point.

Partners earn 25% of the eligible platform fees SourceX actually collects from the referred company's licensing deals, capped at $100,000 per referred company. Rewards become payable only after the buyer pays and SourceX receives its fee; no reward is guaranteed, and the reward is never deducted from what the company receives. Check your firm's policies and fund documents on fees connected to portfolio companies before registering.

This is general information, not legal, tax or financial advice. Confirm with your own counsel, tax adviser or professional body before acting.

When not to pursue it

• The fund needs a specific distribution in a specific quarter.
• The company's records belong mainly to its clients, or are mostly consumer or health data.
• Legacy systems were retired without exports.
• A sale process is live and a license would complicate it.

Next step

Add the cash-path screen to the next portfolio review, alongside the view of records as a non-operating asset in exit planning. Companies that pass can be introduced as soon as you register as a partner; sponsor-specific details are on the operating partner page.