Bridge rounds and down rounds are the financings founders least like to talk about, and both are more common and more survivable than their reputations suggest. Understanding what each actually is takes some of the fear out of them.
A bridge round is capital raised to extend runway to a specific milestone, often the next priced round, when the company is not yet ready to raise it. It is frequently structured as a SAFE or note that will convert into the coming round. A bridge is a bet that a bit more time will unlock a better raise, and used well, it is a tool, not a distress signal.
A down round is a financing at a lower valuation than the previous one. It stings, dilutes more, and can trigger anti-dilution provisions that hurt founders further, but it is often the responsible choice when the alternative is running out of cash. Many enduring companies raised a down round at some point; what matters is that it buys a real path forward, not just a delay.
Both are easier when approached early and honestly. Model the dilution, understand any anti-dilution triggers, and frame the raise around the milestone it unlocks. A clean, well-explained bridge or down round preserves relationships and momentum; a panicked one damages both. This is general information, not investment advice.
Not fatal, if you see them coming.