Fundraising
Bridge round
A short-term funding round, usually convertible notes or SAFEs, raised between priced rounds to extend runway until the next priced round or milestone.
In plain English
A 'bridge' is the round you raise when you're running low on cash but not yet ready for the priced round you want. Usually convertible into the next round at a discount.
Example
Startup raised a $3M seed 14 months ago. Runway is 6 months. They're not yet at the metrics that justify the Series A they want. They raise a $1M bridge in SAFEs from existing investors at a 20% discount to the eventual Series A price. Bridge converts into Series A when it happens.
Why it matters
Bridge rounds buy time. They're necessary when the planned milestone slips; they're toxic when they become a pattern. Repeated bridges signal to the market that the company can't reach its next valuation step, which makes future rounds harder. Insiders often participate; outsiders rarely lead bridges.
Common mistakes
- Treating a bridge as 'just runway' rather than a signal that the next milestone needs to be hit immediately
- Stacking multiple bridges without addressing the underlying growth problem — each bridge dilutes more and signals more weakness
- Accepting cap structures on bridge SAFEs that aren't aligned with the eventual priced round
- Hiding the bridge from the board or new investors — they'll discover it during diligence anyway