Also known as Bridge financing
A bridge round is a smaller, interim financing meant to carry a company from one major round to the next, 'bridging' the gap until it hits the milestones needed to raise a larger priced round.
Key takeaways
A bridge round is a smaller, interim financing meant to carry a company from one major round to the next, 'bridging' the gap until it hits the milestones needed to raise a larger priced round. It's often structured as a convertible note or SAFE and typically comes from existing investors.
A startup burning cash six months before Series A might raise a $1.5M bridge on a SAFE to reach the revenue milestone that unlocks a stronger round.
Bridges buy time, but they're a double-edged sword. Done from strength, to reach a clear milestone, they're smart. Done from desperation, a 'bridge to nowhere' just delays a reckoning and stacks convertible terms that dilute you later. Know exactly what milestone the bridge funds and whether it's genuinely reachable.