distribution

Definition

The return of capital to limited partners when a fund exits an investment, either as cash or occasionally as stock, representing the magical moment when paper gains become real money. The VC equivalent of actually getting your lottery winnings instead of just holding a ticket.

Example Usage

After the acquisition closed, we made a $15M distribution to our LPs, returning 1.5x their invested capital on that deal alone.

Origin

Investment fund terminology from private equity and venture capital structures in the mid-20th century

Fun Fact

Stock distributions (where LPs receive shares instead of cash) are increasingly common post-IPO but often frustrate LPs who prefer liquid returns.

Source: Venture capital fund operations standard terminology

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