Fundraising & Rounds
What is a bridge round in startup fundraising?
A bridge round is a small fundraise between larger priced rounds, typically used to extend runway so a startup can hit milestones needed to raise the next full round.
A bridge round is a smaller, interim fundraise that 'bridges' a startup from its current runway to a point where it can raise a larger, properly priced round.
Bridge rounds are typically done via SAFEs or convertible notes — fast, simple instruments that avoid the negotiation complexity of a full priced round.
Common reasons for bridge rounds: - The company is 3-6 months away from a milestone (revenue target, product launch, partnership) that would unlock a full Series A at better terms - The company undershot its metrics and needs more runway to recover - Market conditions are poor (e.g., 2022-2023 downturn) and the company wants to wait for a better fundraising environment - The company is growing but wants to delay dilutive equity at a lower valuation
Who leads bridges: Existing investors typically lead bridge rounds (insiders bridge). New investors leading bridge rounds is less common but happens when there's conviction about the next milestone.
The danger of bridge rounds: Bridges can become a habit. A company that needs multiple bridges may be avoiding a harder truth: the current strategy isn't working. Each bridge buys time but also dilutes founders and can signal to new investors that current investors have limited conviction.
Good bridges vs. bad bridges: A good bridge has a specific milestone attached — 'we raise $1M now to get to $1M ARR, then raise a Series A.' A bad bridge is just survival capital with no clear path to the next milestone.
Related glossary terms
Related questions
What is a SAFE note?
A SAFE (Simple Agreement for Future Equity) is an investment instrument where an investor gives a startup money now in exchange for the right to receive equity in a future priced round. It's not a loan — there's no interest rate or maturity date.
What is a convertible note?
A convertible note is a short-term debt instrument that converts into equity at a future financing round, typically with a valuation cap and a discount rate as rewards for investing early.
How do startups raise venture capital?
Startups raise venture capital by building traction, crafting a compelling pitch, getting warm introductions to investors, and running a structured fundraising process.