what is dry powder 
dry powder is a slang term referring to marketable securities that are highly liquid and considered cash like dry powder can also refer to cash reserves kept on hand by a company venture capital firm or individual to cover future obligations purchase assets or make acquisitions securities considered to be dry powder could be treasuries or other short term fixed income investment that can be liquidated on short notice in order to provide emergency funding or allow an investor to purchase assets understanding dry powderin its most basic form dry powder is a term that refers to the amount of cash reserves or liquid assets available for use these cash reserves or short term marketable securities are usually kept on hand to cover future obligations that may or may not be foreseen therefore the term dry powder can be used in situations of personal finance in the corporate environment and in venture capital or private equity investing having dry powder on hand can provide investors with an advantage over others who may be holding less liquid assets for example a venture capitalist might decide to hold a substantial strategic amount of cash on hand in order to take advantage of private equity investments that may present themselves for immediate funding this cash would colloquially be referred to as the venture capitalist s dry powder dry powder in the corporate environment