A bridge round is a smaller, often faster round raised between two larger priced rounds, typically to extend runway until the company hits a milestone that justifies the next full raise, or to get through a rough patch.
Bridge rounds are frequently structured as convertible notes or SAFEs, often with a discount to whatever the next priced round ends up being, rewarding investors for funding the company through a gap rather than waiting for a fully negotiated valuation.
A bridge raised from strength, ahead of a milestone, reads very differently to the market than a bridge raised because the company is running low on cash with nothing else lined up. The same instrument, a convertible note bridging to the next round, can signal momentum or distress depending entirely on the story around it.
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