when a company refers to its dry powder it is speaking about the amount of its cash and current assets that can be used to fund working capital needs if for example a company decides to invest almost all of its cash in long term inventory that cannot be easily sold it is reducing the amount of dry powder it has on hand if the economy subsequently takes a downturn and customers reduce the amount of purchases they make the company would be stuck with illiquid inventory but still have monthly operating costs that it needs to pay in this case the reduction in dry powder was ill informed companies generally maintain a sufficient amount of dry powder on hand to maintain daily operations 
dry powder for venture capitalistsdry powder is a commonly used term in the venture capital and startup world this is because all venture capitalists want adequate cash on hand to either invest in a new opportunity or provide additional funding to portfolio companies to fuel growth therefore many venture capitalists keep dry powder on hand choosing to abstain from most investments rather than depleting their capital too quickly dry powder for personal financesimilarly to corporations and venture capital funds individuals should keep dry powder in case of future obligations opportunities or emergencies when an individual keeps their powder dry it means they are holding at least some of their personal net worth in cash or marketable securities that can be drawn on quickly if needed 