Cannot Raise Your Next VC Round Consider a Bridge

Can't raise your next VC round right now? Consider a bridge.

When new primary financings are difficult to come by (which applies to nearly everybody right now), founders turn to the bridge round. Couple key points:

1. The bridge frequently involves investors who are already on the cap table.

2. Bridge rounds typically involved preferred equity or convertible notes, though they can be structured in many different ways

3. They are geared towards giving the company a lift until they are able to raise the next round of primary financing.

4. Carta data shows they have never been more popular

Our next State of Private Markets report should go live in a matter of hours with all sorts of detail on fundraising and valuations for startups - get it in your inbox here: https://lnkd.in/gNa_Dk-F

or join us to discuss the findings live on Feb 21st: https://lnkd.in/eVXt6DpZ

Incidentally, all these bridge rounds will most likely eat into the mountain of "dry powder" sitting in venture capital LP accounts right now. Many VCs will try to ensure their current bets get enough runway, leaving less for net new investments.

#cartadata #bridgerounds #venturecapital #startups #fundraising