Bridge Round
A smaller, fast interim raise meant to extend runway until a larger priced round can be closed.
A bridge round is capital raised between two planned priced rounds, usually to extend runway a few months to hit a milestone, survive a slow fundraising market, or fund a specific initiative before a full raise. It's typically structured as a SAFE or convertible note rather than a new priced round, since negotiating a fresh valuation for a small amount of capital is often not worth the time or dilution cost.
Bridges frequently come from existing investors who want to protect their position without forcing a valuation conversation, and they often carry a discount to whatever the next priced round's valuation turns out to be, compensating bridge investors for taking risk before the company's next real price check.
A bridge that keeps getting extended, or that existing investors are reluctant to fund, is one of the clearest warning signs in venture — insiders typically have the best information about the company and their hesitation is a signal outside investors read closely.
How a bridge is raised tells you a lot about the company's health. An insider-led bridge tied to a concrete milestone, where existing investors put in more money at reasonable terms, reads as conviction. A bridge with a steep discount, heavy structure, or a string of extensions reads as a company that couldn't raise a full round — and the market prices that in.
Bridges also set terms for what comes next. The discount, cap, and any interest on a bridge note flow straight into the next round's cap table, and each extension piles on more discounts, accrued interest, and MFN clauses that a new lead investor has to absorb. Sloppy bridge terms can quietly reprice the round that follows.
Insider money is necessary but not sufficient. The real validation for a bridged company is a new lead investor willing to price the next round.
A startup raises a $2M bridge note with a 20% discount and a $20M valuation cap. Nine months later it closes a Series A at a $40M pre-money valuation, priced at $4.00 per share. The discounted price would be $3.20, but the cap implies $2.00 per share ($4.00 x $20M / $40M), so the note converts at $2.00 — roughly 1,000,000 shares before interest, double what $2M buys at the round price. That's the bridge investor's reward for taking risk before the price check.
Raise a bridge only with a specific, achievable milestone attached (not just 'more runway') — investors funding a bridge are underwriting your ability to hit that milestone and price the next round off it.
Is a bridge round the same as a Series A extension?
Often functionally yes — an 'extension' is usually a bridge structured as additional shares of the prior round's preferred stock rather than a new instrument, avoiding a fresh valuation negotiation.
Who usually funds a bridge round?
Existing investors, most often. They already know the company, can move fast, and have a direct incentive to keep it alive until the next priced round. Outsider-led bridges happen but are rarer — and a bridge insiders decline to fund is a red flag for everyone watching.
How is a bridge round different from a seed round?
A seed round is a company's first institutional raise, usually with new investors. A bridge happens between planned rounds, is smaller and faster, is usually insider-led, and exists specifically to get the company to its next financing.
Related terms
Run the numbers yourself: dilution, SAFE conversion, and fund-returner calculators.