A bridge round is financing raised between priced rounds to extend the company’s runway to an event that should improve its price: a technical milestone, a commercial proof, a better market. It is usually structured as convertibles (SAFEs or notes) rather than priced equity, most often from existing investors, at terms anchored on the last round (same cap, or a modest discount to the next round).
The instrument is neutral; the reason is everything. A good bridge is an investment case: the milestone is named, the amount is sized to reach it with margin, and the insiders writing it can say why the milestone changes the next round’s price. A defensive bridge, money to postpone a hard conversation, shows up in the next diligence as exactly that, and stacks one more cap onto the convertible pile the Series A must digest.
The signaling cuts both ways. Insiders bridging at the prior cap reads as conviction if the milestone story holds, and as a quiet markdown if it does not; outsiders joining a bridge strengthens it. The honest comparison a founder must run before bridging: against a smaller priced round at a lower valuation today, which path reaches the value-creating proof with less total dilution and cleaner governance? Sometimes the down round is the cheaper bridge.