Most startups don’t do that make a clean run from their pre-seed round to an IPO when it comes to fundraising. Fast-growing tech companies sometimes pause at certain stages, for example to collect a little extra cash over the terms of their previous round.
This is especially true when the economy changes for the worse and start-ups are encouraged to do so Raise an overtime round, or bridge round. Why might these rounds be more popular in weaker macro periods? Because if startups can buy a little more time to grow before raising their next round of prices, they might be able to better defend their most recent valuation, or maybe even surpass it, by officially raising.
Data by card, a software service that supports company cap charts and the like, point out that bridging rounds — “a type of bridging funding that companies can choose while waiting for a major fundraiser” in their own language — are growing in popularity, as is TechCrunch determines expected based on our reporting on this topic. However, Where It came as a bit of a surprise that the promoted variety is gaining the most popularity. It turns out that the companies with the least raised capital aren’t the ones seeing the greatest growth in bridge round activity.
Bridge rounds are the late-stage rage – TechCrunch Source link Bridge rounds are the late-stage rage – TechCrunch