What is a Bridge Round?
Bridge Round
A Bridge Round is a temporary funding round raised by a startup to extend its runway until it raises a larger institutional round.
Why It Matters for Startups
Directly dictates the cap table and dilution structure during fundraising; understanding Bridge Round helps founders model equity distributions when structuring rounds for runway extension under capital delay conditions.
Detailed Deep Dive
A Bridge Round is a temporary funding round raised by a startup to extend its runway until it raises a larger institutional round or achieves profitability. Usually structured as a convertible note or SAFE note, bridge rounds are often funded by existing investors who want to support the company through a temporary cash crunch or help it reach critical valuation milestones.
Frequently Asked Questions
Q:How is a bridge round usually structured?
Typically as a convertible note or SAFE note that converts into equity during the subsequent priced round.
Q:Who participates in a bridge round?
Usually existing angel or VC investors who want to support the company through a temporary cash gap.
Quick Facts
- CategoryFunding
- Key ApplicationRunway extension under capital delay conditions
Coverage Trend12 Weeks
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