The Company: Fintech infrastructure for SMB lenders. $1.1M ARR at the time of the first bridge, growing 12% MoM.
The Outcome: Three bridge rounds over 18 months. $2.8M raised at increasingly unfavorable terms. Series A still not closed. Cap table now has 47% in liquidation preferences ahead of common.
The first bridge solved a runway problem but created a momentum problem. Each subsequent bridge made the Series A harder, not easier.
The Timeline:
Month 0: Series A process stalls at partner meetings. Feedback: “Come back at $2M ARR.”
Month 1: Raises $800K bridge from existing angels. Terms: 20% discount, $12M cap. Runway extended 8 months.
Month 9: At $1.6M ARR. Restarts Series A process. Feedback: “The market has shifted. We need to see $2.5M ARR now.”
Month 10: Raises $1.2M bridge from new angels and a small fund. Terms: 25% discount, $10M cap (down from $12M). Runway extended 7 months.
Month 16: At $2.1M ARR. Growth slowed to 8% MoM. Series A feedback: “Cap table is complicated. What’s the fully-diluted ownership?”
Month 17: Raises $800K “final” bridge. Terms: 30% discount, $8M cap, 1x participating preferred.
Month 18: Still raising.
What went wrong:
1. Bridge math compounds against you. Each bridge added dilution and complexity. By bridge three, the cap table story required 10 minutes to explain. VCs pattern-match against complexity.
2. The goalposts kept moving. The “come back at $X ARR” feedback was always 6 months away. But the market moved too. Series A bars rose faster than the company grew.
3. Bridge investors aren’t Series A investors. The angels and small funds who wrote bridge checks couldn’t lead the Series A. Every bridge added more people who wanted the Series A to happen but couldn’t make it happen.
4. Growth rate decay. Bridge rounds come with anxiety. The founder spent 40% of time fundraising instead of selling. Growth slowed, making the next raise harder.
A bridge is not a strategy. It's a bet that something will change. If you're bridging because "we just need more time," you're probably bridging toward failure.
What should have happened:
At month 0, when Series A stalled:
- Get explicit feedback. Not “come back at $2M” but “what specific evidence would change your decision?”
- Evaluate the alternative. Could 12 more months of bootstrapped growth get there? Sometimes slower growth with less dilution wins.
- If bridging, bridge once and big. Raise 18 months of runway, not 8. Give yourself one shot to hit the bar, not three diminishing shots.
- Set a kill criteria. “If we don’t have a term sheet by month X, we pursue acquisition or profitability, not another bridge.”
The founder’s reflection:
“I kept thinking the next milestone would unlock it. But each bridge just raised the bar and lowered my leverage. I should have either raised a proper seed extension or accepted that Series A wasn’t happening and optimized for a different outcome.”