What is a bridge round?
Short Answer
A bridge round is short-term financing (typically SAFEs or convertible notes) that bridges the gap between current funding and the next institutional round, allowing the company to extend runway while avoiding a down round.
Full Explanation
A company has 6 months of runway but is not yet ready for a Series A (metrics not strong enough, product not polished). Rather than raise at a lower valuation (down round), they raise a bridge round from existing investors, angels, or early supporters. This is quick capital (weeks vs. months) that extends runway to reach Series A readiness. Bridge rounds are typically structured as SAFEs or convertible notes with a valuation cap that matches the previous round (protecting bridge investors from receiving fewer shares than Series A participants). For the company, bridges are efficient: they avoid the delay and damage of a full Series A process when metrics are not yet ready. For investors, bridges are higher risk — they are betting the company reaches Series A terms. Bridges are common in VC-backed companies and have become normalised as a way to manage fundraising timing. However, too many bridge rounds are a red flag: they suggest the company is struggling to reach Series A milestones. One bridge is normal; three or more suggests deeper issues.
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