Dry Powder

What is Dry Powder?

Dry powder refers to cash reserves that investors or companies keep on hand to take advantage of future investment opportunities. In the context of venture capital, dry powder enables firms to invest in promising startups or support portfolio companies during downturns. It also allows startups to quickly respond to strategic opportunities without needing to raise funds immediately.

Benefits of Maintaining Dry Powder

• Investment Flexibility: Allows investors to act quickly on high-potential opportunities.
• Financial Stability: Provides a buffer for navigating economic uncertainties.
• Strategic Reserves: Enables startups to invest in growth or acquisitions when opportunities arise.

Related Terms and Concepts

Cash reserves, venture capital, investment strategy, financial planning