There's been a massive rise in hidden fundraising across private startups.
The capital raised on SAFEs and Convertible Notes ballooned from $3.5B in 2021 to $13.5B in 2025.
These instruments, especially the Simple Agreement for Future Equity (SAFE), are mostly associated with tiny startups. Those young companies using convertible instruments to raise money because a) it's faster and more convenient and b) they don't want to have a hard valuation yet.
...so why have companies at Series A, B, or beyond turned to convertibles as well?
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Could be that later-stage companies use notes (usually notes by Series B, usually SAFEs before then) to build hybrid rounds with a little priced equity and a little convertible equity.
Could be that these are bridge rounds that no one on the cap table wants to admit are really down rounds. Signaling risk avoidance is real.
Bridges in general have just become much more common. Going from A to B to C these days is more often A -> A1 -> A2 -> B, etc.
Different investors have different levels of sophistication and/or fund economics strategies.
Of course too many convertibles can completely wreck the next rounds math. And we haven't started talking about all the wild SPV structures present in the most in-demand AI giants.
I get the reasoning behind some of these changes, but give me a good, standard priced equity round any day (especially from Series A onwards!)
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