Rounds & financing
Also called bridge financing, extension round
A bridge round is short-term financing raised between priced rounds to extend runway until the company can reach the milestones needed for its next full round, usually structured as a convertible note or SAFE.
Most bridges are convertible instruments rather than priced equity, because the point is to avoid setting a valuation while the company is between proof points. The note or SAFE converts into the next priced round, normally with a discount, a cap, or both.
Existing investors often lead them. An inside bridge signals that current backers believe the milestones are reachable; a bridge that existing investors decline to join is a difficult signal for outside investors to ignore.
The useful question about any bridge is what specifically it buys. A bridge to a named milestone, such as a revenue level or a regulatory approval, has a clear success condition. A bridge raised only to extend runway tends to be followed by another one.
Bridges that stack can also complicate the next round, since several instruments with different caps and discounts convert at once and the combined dilution frequently surprises founders.
Not on its own. A bridge to a defined milestone led by existing investors is routine. Repeated bridges without a clear next round are the concerning pattern.
Usually it is not priced. It converts into the next round using a valuation cap, a discount, or both, which defers the valuation question to the priced financing.
Long enough to reach the milestone plus the time needed to run the next raise, which usually means at least nine to twelve months of runway rather than three.
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