Vanshvik Family Office committed Rs 50 crore to a venture fund. Given the capital calls, distributions and reported NAVs, draw its J-curve and compute DPI, TVPI and IRR at years 5, 8 and 10.

At year 5 DPI is zero and TVPI 0.83x; at year 8 DPI 1.2x and TVPI 2.6x; at year 10 both are 2.4x, an IRR of about 16%. The curve bottoms at minus Rs 46 crore in year 5 and turns positive in year 8. TVPI at year 8 was higher than the final result, because the Rs 70 crore NAV became Rs 60 crore of cash. Only DPI is money in the bank.

Planting a mango orchard means years of buying saplings, fertiliser and water before the first crop. Your bank balance falls, flattens, and only then climbs. A venture fund calls money for its first five or six years and returns it only as companies are sold, so the LP's cumulative cash dips deep before it rises: the J-curve. Vanshvik's cumulative net cash falls to minus Rs 46 crore by year 5, is still minus Rs 30 crore in year 7, and only turns positive in year 8.

DPIDistributions to paid-in capital: cash the LP has received back, divided by the money it has paid in. It counts only realised money. counts cash back. TVPITotal value to paid-in capital: cash received plus the reported value still held, divided by money paid in. adds the NAV still held. At year 5, Rs 46 crore has been paid in and nothing returned: DPI 0, TVPI Rs 38 crore over 46, 0.83x. At the bottom of the J the fund is reporting less than the money put in, which is normal: fees and early write-offs arrive before the winners are sold. The IRR to that point, treating NAV as if it were cash, is -7.8%.

At year 8 all Rs 50 crore has been called and Rs 60 crore returned: DPI 1.2x. With the Rs 70 crore NAV, TVPI is 2.6x and the IRR 20.4%. At year 10 the fund has wound up, Rs 120 crore has come back, and DPI and TVPI are both 2.4x, with a final IRR of 16.5%.

Compare year 8 with year 10. The fund said its remaining holdings were worth Rs 70 crore; they produced Rs 60 crore. TVPI at year 8 overstated the final outcome by 0.2x, because NAV is the manager's estimate and the last companies are often the hardest to sell. That is why experienced LPs weight DPI more heavily as a fund ages, and why a fund raising its next vehicle on a high TVPI and a low DPI gets harder questions. The IRR also fell from 20% to 16% as the late, smaller distributions arrived.

One more lesson is about liquidity rather than return. Vanshvik had to keep Rs 50 crore ready to meet calls at short notice for six years, while its money was out for a long time before any came back. A family office planning its other commitments needs the shape of this curve, not just the final multiple.