Venture
Bridge Round
A bridge round is capital raised between two priced funding rounds, usually structured as a convertible note or SAFE, meant to extend runway until the company hits a milestone that justifies a full priced round.
Bridges exist because priced rounds take months to negotiate and a company running low on cash cannot always wait. Existing investors often lead a bridge to protect their position rather than see the company run out of money before the next raise.
A bridge is not inherently a bad sign, but the market reads it differently depending on who's writing the check. A bridge led by new outside investors reads as validation; a bridge led entirely by insiders, especially at a flat or discounted valuation, reads as a signal that the company struggled to raise externally.
Terms typically include a discount to the next priced round (10–25%) and sometimes a valuation cap, so bridge investors are compensated for taking risk before the company's value is reset by a new lead investor.