Dry Powder
The total capital venture funds have raised from LPs but not yet deployed into investments.
Dry powder refers to committed capital that venture funds have raised but haven't yet invested — money sitting available, ready to be called and deployed into new deals. Industry-wide dry powder levels are a widely watched indicator of how much capital is available to be put to work, and elevated dry powder is often cited as a factor supporting valuations even during periods of slower deal activity.
High dry powder doesn't necessarily mean funds are actively deploying quickly — funds can and do sit on committed but uncalled capital for extended periods when they're being selective, waiting for better pricing, or when their most active investment period has passed and they're focused on existing portfolio companies instead.
Don't read industry-wide dry powder headlines as a signal that any specific fund is eager to deploy right now — ask a target investor directly about their own fund's current pace, remaining reserves, and stage in their investment cycle before assuming their capital is readily available.
Does high industry dry powder mean valuations will rise?
It's one supportive factor among many, but dry powder doesn't automatically translate into deployment — macro conditions, fund-specific strategy, and investor selectivity all also shape whether available capital actually gets put to work at higher prices.
Related terms
Run the numbers yourself: dilution, SAFE conversion, and fund-returner calculators.