Backswing Ventures announced that its Fund II, a 2023 vintage fund, has surpassed 1.0x Distributed to Paid-In Capital (DPI), returning more capital to investors than was originally contributed in slightly more than three years since inception.
The milestone highlights a rare level of realized liquidity in today’s venture capital environment, where many funds remain dependent on future acquisitions or public offerings to generate returns. According to benchmarking data from Carta as of the fourth quarter of 2025, most 2023 vintage venture funds had produced limited realized distributions, with the 90th percentile DPI standing at approximately 0.06x.
Against that backdrop, Backswing Ventures said Fund II’s achievement reflects a significantly differentiated capital return profile. The firm noted that the DPI milestone was generated from only two major exits, while eight portfolio companies remain in the fund and are currently performing well. Fund II also maintains a strong Multiple on Invested Capital (MOIC), reflecting both realized gains and potential future upside from the remaining portfolio.
Backswing said its investment strategy places a strong emphasis on liquidity and capital efficiency. The firm actively evaluates opportunities in secondary markets and other liquidity pathways, aiming to return capital to limited partners earlier than is typical in venture capital. The strategy is designed to reduce duration risk, provide downside protection, and allow investors to redeploy capital into new opportunities.
The firm evaluates both partial and full exit opportunities when it believes the majority of risk-adjusted return potential has been achieved or when another owner may be better positioned to support a company’s next stage of growth. According to Backswing, this approach has enabled the firm to generate returns independent of broader IPO market conditions or merger and acquisition cycles.
Backswing Ventures focuses on early-stage dual-use and defense technology companies. Its portfolio spans sectors including aerospace, autonomy, defense systems, infrastructure, cybersecurity, and national security technologies.
What 1.0x DPI Means
Distributed to Paid-In Capital (DPI) is a venture capital performance metric that measures how much cash a fund has returned to investors relative to the amount of capital those investors contributed. A DPI of 1.0x means that a fund has distributed an amount equal to 100% of the capital invested by its limited partners.
For example, if investors committed and contributed $10 million to a fund, a 1.0x DPI would indicate that the fund has already returned $10 million in realized distributions. Any remaining portfolio holdings would represent potential additional upside beyond the capital that has already been returned. Because DPI is based on actual cash distributions rather than unrealized valuations, it is widely viewed as one of the most important indicators of realized fund performance. In the venture capital industry, achieving a 1.0x DPI in just over three years is relatively uncommon, particularly for a 2023 vintage fund, given the limited liquidity environment and slower pace of IPOs and acquisitions in recent years.
KEY QUOTES:
“Returning capital is not an afterthought for us—it is central to how we underwrite investments and manage portfolio positions. Our objective is to compound investor capital efficiently while minimizing unnecessary duration risk.”
“At a time when much of venture remains heavily marked but lightly realized, we believe actual distributions matter more than ever. DPI is ultimately what LPs can spend, redeploy, and measure.”
Kyle Asman, Managing Partner, Backswing Ventures
