Picture this: you’re a founder on the cusp of your next significant milestone, say your Series A or B, but you’re not quite there yet. Growth is real, traction is visible, but markets are tighter, valuations are scrutinized, and the next “big” round feels like it might arrive any time. In that limbo, you raise a bridge round, and guess what, you are not alone.
In Q2 2025, data from Carta reveals that a striking 16.6% of all venture capital raised came via bridge or extension rounds, up from 11.8% during the same period last year. Let’s unpack what’s driving this rise, what it means for entrepreneurs and investors alike, and how to think about bridge rounds in your strategy moving forward.
Why The Bump in Bridge Rounds?
The bridge route taken by the VCs is a strategic move to make good bets at the right time. Here’s why:
- Exit and primary-round chill
With fewer IPOs and fewer large primary rounds hitting the market, companies are increasingly using bridges to hold on, keeping momentum alive while waiting for conditions to improve. According to Carta, the annual U.S. IPO count fell by 62% from 2021 to 2024, and new venture rounds declined by 36%. Simply put: when your exit runway is bumpy and the subsequent large round is uncertain, a bridge becomes a viable lifeline.
- Runway extension becomes strategic
In the current market, companies are less inclined to raise priced rounds prematurely if they feel they might trigger down-round risk or get undervalued. A bridge allows a founder to “buy time” to extend the runway, hit another milestone, and position for the next major round when the market is more receptive. Carta notes that the median interval between primary funding rounds across all stages in Q2 was 696 days, about 23 months, versus nearly 600 days two years ago.
- Reduced stigma around bridges
Historically, a bridge round could signal trouble, but today the market views them as a pragmatic move.
Marc Schröder, founding and managing partner at MGV, an early-stage venture fund, says: “If you’re a startup that needs some additional runway to build up your ARR and surpass that elevated growth round bar, you should probably go for it. Investors will be interested if you’ve got strong traction, regardless of whether it took a bridge round to get there.
- Stage-dependent uptick
The uptick isn’t uniform across all stages. In Q2, the bridge share reached 22.5% of cash at the Series A stage and 20%+ at the Series D stage, indicating that even mature companies are using bridge rounds strategically.
So What Does This Mean For You?
If you’re a founder, you need to:
Gauge your runway critically: If you’re signaling a priced round in the near term and feel good about your metrics, a bridge may slow momentum. But if market conditions seem murky, a bridge that buys 12-18 months can be the smarter play.
Structure the rounds: Ensure your bridge preserves optionality (conversion terms, valuation caps, a clear next-round plan) without causing crippling dilution.
Be careful with the messaging: If investors perceive the bridge as “we failed to raise,” you’ll carry the stigma. If you frame it as “we’re doubling down and extending runway to hit milestone X,” you preserve strategic tone.
Plan the exit or primary round milestone: Use the extension effectively. Hit another KPI (ARR, profitability, growth rate), so when you come back to market, you’re stronger and the narrative is straightforward.
If you are an investor, here are a few things to note:
Bridges demand discipline: These rounds are not “raise now” signals; they’re “buy time” signals. Strong underwriting requires assessing whether the company is genuinely traversing a valley or just stalling until better headlines.
Valuation resets may lurk: While bridges usually don’t trigger new valuations (or do at least a lighter mark), they do push the next priced round out. That means you should calibrate your return expectations accordingly.
Portfolio implications: If many portfolio companies are bridging, it could signal broader market caution and slower exits ahead – a cue to stress-test fund models.
Signal to market: An uptick in bridge share like the 16.6% in Q2 may tell you that the “standard” venture cycle is still on pause, and that smart investors are adapting tactically rather than simply pushing full-throttle.
Adopt A Strategic Mindset
In an era of slower liquidity, tighter markets, and elevated investor scrutiny, the uptick in bridge rounds to 16.6% of venture capital in Q2 is a sign of adaptation. Founders and investors are realizing that the old “raise next round quickly” playbook has been replaced, at least temporarily, by a “extend runway, hit key milestone, and raise next round” cadence.
Remember that bridge rounds necessary do not mean something is wrong; it is most likely a tactical decision to position the company better. It can be a win-win situation if the due diligence allows.
The message is clear for entrepreneurs – embed the bridge into your plan with clarity. Set the milestone, define the path, and signal strength.
For investors, the rise in bridges is a signal of timing and selectivity. Use it as a lens into founder discipline, runway health, and next-round readiness.
