bridge round

Definition

Emergency funding meant to tide a startup over until the 'real' funding round happens, often at desperate terms. Named after a bridge because you're hoping it doesn't collapse before you reach the other side.

Example Usage

The Series B negotiations were taking forever, so they raised a $2M bridge round from existing investors to avoid running out of cash.

Origin

Banking terminology adopted into venture capital during the 1980s

Fun Fact

Bridge rounds often signal trouble to savvy investors—if a company needs a bridge, it usually means the next round is harder to close than expected.

Source: Venture capital financing terminology

Related Terms

Advanced

Equity Dilution

The process by which your ownership percentage shrinks with each funding round until you own approximately as much of your company as you own of the Pacific Ocean. It's like splitting a pizza with more and more people, except you baked the pizza and now you get one olive.

🚀 Startup / VC

Advanced

anti-dilution protection

A clause protecting investors from getting screwed when a company raises money at a lower valuation, automatically giving them more shares to maintain their investment value. Founders hate it; investors demand it.

🚀 Startup / VC

Beginner

liquidity event

The magical moment when your paper wealth becomes actual money you can spend—typically through an acquisition or IPO. It's what everyone's working toward but few actually experience.

🚀 Startup / VC

Intermediate

Lean Startup

A methodology for building companies by testing hypotheses quickly and cheaply, based on a book that every founder has read and none have followed. It's called lean because by the time you're done pivoting, your bank account is extremely thin.

🚀 Startup / VC

Beginner

gross margin

Revenue minus cost of goods sold, expressed as a percentage—the fundamental measure of whether your business model makes sense before accounting for all those pesky operating expenses. VCs want this above 70% for SaaS.

🚀 Startup / VC

Beginner

spray and pray

An investment strategy of making many small bets across countless startups, hoping a few will hit big enough to compensate for the inevitable carnage. The venture capital equivalent of buying lottery tickets in bulk.

🚀 Startup / VC

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