Bridge round

A bridge round is a short-term capital raise designed to extend a startup's runway — typically by a few months — when the company is not yet ready to close a full priced round but needs additional funds to reach the next meaningful milestone. The term comes from the idea of building a financial bridge between the current moment and the next major round.

Bridge rounds most commonly involve existing investors who are already on the cap table and motivated to protect their prior investment. This insider participation is often faster to close than bringing in new investors, since existing backers already understand the business and have fewer due diligence questions. In some cases, friendly angels or strategic investors may also participate.

Bridge rounds are typically structured as convertible notes or SAFEs rather than priced equity, which avoids the need to set a new valuation at a moment when the company may be in a weaker negotiating position. The note converts into shares at the next qualified priced round, often with a discount or a valuation cap that rewards the bridge investor for taking additional risk.

Founders should approach bridge rounds with honesty and care. Raising a bridge because the company is behind on its milestones — and investors know it — requires transparent communication about what went wrong and what will be different. A well-managed bridge that genuinely buys time to reach a specific milestone can preserve the company; a bridge raised out of desperation without a credible plan often just delays an inevitable outcome. Burning through a bridge without hitting the intended milestone is a critical signal that the business model needs to be rethought.