Bridge Round
A smaller funding round designed to extend runway until a larger round can be raised.
Definition
A bridge round is interim financing that "bridges" a company between major funding rounds. It's typically raised when the company needs more runway to hit milestones required for the next round but isn't ready to raise yet. Bridge rounds are usually smaller ($200K-$2M), often from existing investors, and structured as convertible notes or SAFEs.
Bridge rounds can be a lifeline or a red flag depending on context. If you're close to key milestones and need 3-6 more months, a bridge makes sense. If you're raising a bridge because you can't raise a full round, it signals weakness.
Why it matters for founders
A well-timed bridge round can mean the difference between hitting Series A milestones and running out of cash. But bridges come with costs: additional dilution, potential down-round risk, and signal risk to new investors who wonder why you needed a bridge.
Example
A startup with $1.5M ARR needs to reach $2.5M to raise a strong Series A. They have 4 months of runway. Existing investors provide a $500K bridge on a SAFE to buy 6 more months, enough to hit the ARR target and raise a $12M Series A at a premium valuation.
How Foundra helps
Foundra's phased validation approach helps you reach fundraising milestones faster, reducing the likelihood of needing bridge financing.
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Related terms
Convertible Note
A short-term loan that converts into equity during a future funding round.
SAFE Note
A Simple Agreement for Future Equity - an investment instrument that converts to equity at a future priced round.
Runway
How many months your startup can survive before running out of cash.
Series A
The first major institutional venture capital round, typically $5M-$20M, funding the transition from product-market fit to scalable growth.