Dry Powder
Definition
Dry powder is capital that investors have committed to a fund but that has not yet been invested, money raised and waiting for deals. The term comes from keeping gunpowder dry until the moment of battle.
In practice
Industry-wide dry powder is watched as a gauge of future deal activity and of pricing pressure: committed capital must eventually be spent, and funds that sit on it too long return it. High dry powder plus scarce targets is how auction prices get silly.