# What is Dry Powder? Definition & Technical Mechanics

> **Source:** [SPIDITS AI Startup & Venture Intelligence Glossary](https://spidits.com/startup-glossary)  
> **Category:** Funding  
> **Canonical Citation:** [https://spidits.com/startup-glossary/dry-powder](https://spidits.com/startup-glossary/dry-powder)

## Definition
Dry Powder refers to the cash reserves committed by Limited Partners to a venture capital firm that have not yet been deployed or invested in startups.

## Architectural Mechanics & Deep Dive
Dry Powder refers to the cash reserves committed by Limited Partners to a venture capital firm that have not yet been deployed or invested in startups.

## Industry Applications & Real-World Use Cases
VC investable capital metrics

## Frequently Asked Questions

### Why is dry powder monitored in the VC industry?
It indicates the amount of capital available to fund new deals and support existing portfolio companies.

### Does dry powder earn fees?
Yes, VCs typically draw management fees on committed capital (dry powder) to run the fund operations.

## Related Terminology
- [venture-capital](https://spidits.com/startup-glossary/venture-capital)
- [capital-call](https://spidits.com/startup-glossary/capital-call)
- [management-fee](https://spidits.com/startup-glossary/management-fee)

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*From the SPIDITS AI Knowledge Base (300+ terms indexed). Explore full technical definitions: [https://spidits.com/startup-glossary](https://spidits.com/startup-glossary)*