Bridge Round

TL;DR

A short-term funding round between priced rounds, often a SAFE or note from existing investors, used to extend runway to the next milestone.

A bridge round provides additional capital between two priced rounds, usually to give the company more time to hit the milestone the next priced round requires. Existing investors are the most common bridge participants because they have the strongest incentive to protect prior investment.

Bridges are usually structured as SAFEs or convertible notes with a discount and a cap, designed to convert into the next priced round. A 'bridge to nowhere' — a bridge with no clear next round in sight — is a danger sign for the company.

Worked example

At $4M ARR but burning faster than planned, the team raises a $6M bridge SAFE from existing investors at the prior round's $60M cap (or 20% discount, whichever is better) — extending runway 9 months to hit the milestones needed for a clean Series B.

Common pitfalls

• Bridging to a milestone the company can't actually hit.
• Letting the bridge cap stack with the prior round and crush founder ownership.
• Mistaking a bridge for a permanent round of capital.

When this shows up in a pitch deck

Bridge fundraising is rarely pitched in a public deck; it's typically negotiated with existing investors directly.

Related terms

• SAFE — Y Combinator's Simple Agreement for Future Equity — a contract that gives an investor the right to equity in a future priced round, with no debt or interest.
• Convertible Note — Short-term debt that converts into equity at a future priced round, typically with a discount, a valuation cap, and an interest rate.
• Valuation Cap — The maximum company valuation at which a SAFE or convertible note will convert into equity, protecting early investors from dilution at high prices.
• Runway — The number of months the current cash balance will last at the current net burn rate before the company runs out of money.
• Down Round — A funding round priced at a lower valuation per share than the previous round, typically triggering anti-dilution adjustments and signaling stress.

Use this in your next pitch deck

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