Definition of 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.
In 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.
The cash reserves that a company keeps on hand in the event of needing capital to cover future financial obligations.
How to use Dry powder in a sentence?
- The term is often used in terms of venture capitalists, where dry powder allows them to invest in opportunities as they arise.
- Dry powder refers to cash or marketable securities that are low-risk and highly liquid and convertible to cash.
- Funds held as dry powder are kept in reserve to be deployed in case of emergency.
Meaning of Dry powder & Dry powder Definition