"Dry powder" refers to cash reserves or liquid assets that investors, such as private equity firms or venture capitalists, keep on hand to take advantage of new investment opportunities. This term highlights the importance of having readily available funds to act quickly in a competitive market. In finance, maintaining dry powder allows firms to respond to market fluctuations, support existing portfolio companies, or seize attractive deals without needing to liquidate other investments. This strategy is crucial for maximizing returns and ensuring financial flexibility in various economic conditions.