The Mirage of “Dry Powder” in Venture Capital [Video]

For investors looking at venture capital funds, one metric that often gets highlighted is the amount of “dry powder” a firm has available to deploy into new investments. Dry powder refers to the capital commitments that a VC firm has already raised from its limited partners but has not yet invested or allocated to portfolio companies. On its face, a larger dry powder number can seem appealing – a sign that a VC has plenty of ammunition left to make new investments into promising startups. However, digging deeper reveals that dry powder figures can be highly misleading indicators of a fund’s actual investment capacity and pace.

Read as an article: https://www.alphanome.ai/post/the-mirage-of-dry-powder-in-venture-capital

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