The Good, the Bad, and the Risky: Understanding Bridge Rounds
In this episode of Venture Declassified, hosts Mike Kelly, Ben Pidgeon, and Jacob Schpok take a hard look at bridge rounds—what they are, when they make sense, and when they’re really just a disguised recap.
The conversation starts with definitions: a bridge round is typically a smaller, short-term raise—often structured as a convertible note or SAFE—intended to extend a company’s runway until the next major milestone. But as the hosts point out, bridges can fall into three very different categories: a pivot where the company needs fresh conviction, a quick infusion of capital to hold a team together until revenue catches up, or a milestone-driven raise where investors want a bit more proof before the next priced round.
The discussion also touches on founder storytelling and investor diligence. Is the pitch grounded in new information and realistic milestones, or is it just recycled pipeline promises? Asking for the prior pitch deck, comparing KPIs over time, and paying attention to who else is writing checks can reveal the true state of play.
Whether you’re an angel investor considering a bridge, a founder debating how to structure a raise, or just curious about the mechanics of early-stage capital, this episode offers a candid and practical breakdown of how bridges can either keep a company on track—or lead it further into trouble.
Key Topics
• Defining bridge rounds and how they differ from full priced round
• Common scenarios where bridges arise: pivots, milestone-driven raises, and team runway extensions
• Extension rounds and how insider vs. outsider participation signals confidence
• Market conditions and their impact on valuations and recapitalizations
• Risks of ego and financial incentives driving bridge decisions
• Governance dynamics: insider commitment, board participation, and signaling strength
• Key diligence questions for angels considering a bridge investment
Connect
Mike Kelly
• Website
Ben Pidgeon
Jacob Schpok
Connect with DeveloperTown
DeveloperTown is a multi-faceted software consultancy for today’s IT and Business Leaders. They create world-class digital experiences to help businesses succeed in a competitive digital world.
Linkedin
Twitter
Facebook
Hear more inspirational and motivational interviews like this one at TheInnovationSeries.com, brought to you by DeveloperTown.