What is bridge financing?
Bridge financing is short-term capital provided to a company to fund operations between major financing events — most commonly between two equity rounds or in the run-up to a planned exit. Bridge financings are typically structured as convertible notes, SAFEs or short-term term loans, repayable from the proceeds of the next milestone.
Bridge rounds carry mixed signals: they can extend runway constructively before a planned milestone, but a series of unplanned bridges may indicate underlying business or fundraising difficulties. Pricing and conversion terms (caps, discounts) reflect both market conditions and the perceived risk of the bridge period.