dry powder

Definition

Unspent capital sitting in a VC fund, waiting to be deployed into investments. The ammunition that lets VCs act fast when hot deals emerge or support portfolio companies needing emergency cash.

Example Usage

The fund still had $150M in dry powder after their first year, giving them flexibility to lead rounds without going back to LPs for more capital.

Origin

Military term for gunpowder kept dry and ready to use, adopted into finance in the 1980s-1990s

Fun Fact

Global VC dry powder reached over $500 billion in 2022—record amounts of cash sitting idle while investors struggled to find deals at reasonable valuations.

Source: Investment management and financial journalism terminology

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