Most beginners don’t. Have a clean run from their pre-seed round through the IPO when it comes to fundraising. Fast-growing tech companies sometimes pause at certain stages, such as raising a little more money on their early-round deals.
This is especially true when the economy takes a turn for the worse and startups are encouraged to raise an extension round or bridge round. Why might those rounds be more prominent in less macroeconomic times? Because if startups can buy a little more time to grow before the next price hike, they can better defend their recent valuations, or perhaps outperform when they raise regularly.
Data from Mapping, a software service that supports companies’ capital tables and the like, indicates that bridge rounds — “a temporary form of financing that companies can choose while waiting for a big fundraiser,” in its own words — are growing in popularity. As TechCrunch expected, based on our report on the matter. however, where Funding diversity is gaining so much popularity, it was a bit of a surprise. Smaller capitalization companies are not likely to see the biggest gains in bridge round activity.
