What are the pros and cons of raising a bridge round versus a Series B round? (2024)

FAQs

What are the pros and cons of raising a bridge round versus a Series B round? ›

Raising a bridge round versus a Series B round can have different advantages and disadvantages for your startup, depending on your situation and goals. For instance, a bridge round can be faster and easier to raise than a Series B round, as it involves fewer investors, less due diligence, and simpler terms.

Company Growth

Naturally, investors want to review company growth year-over-year (YOY). Typically, Series B VCs like to see the company growing at 50% or more YOY Leonard says. This goal might seem somewhat hefty, but meeting this milestone isn't such a tall order when the above three parameters are in place.

While bridge rounds often carry negative connotations—such as implying the company is in financial trouble—that is not always the case. Bridge rounds might also provide an interim cash infusion to capitalize on rapid growth or prepare for an IPO.

How much revenue do you need to raise a Series B? There is no hard and fast rule, but most companies generate at least $5 million in revenue before they are ready for a Series B investment. Usually, this number is much higher, and they should show growth month-over-month.

A Series B round is usually between $7 million and $10 million. Companies can expect a valuation between $30 million and $60 million. Series B funding usually comes from venture capital firms, often the same investors who led the previous round.

Seed round dilution: 20% (or more if you need more money) Series A round dilution: 20% Series B round dilution: 15% Series C round dilution: 10 to 15%

According to research, the chance of failing for a startup past Series B is about 1%. Most Series B startups are valued between $30 million and $60 million. For context, the average Series F startup is valued around $400 million.

Club and Tournament Games

A round can range from 21 to 24 minutes, averaging about 7 to 8 minutes per hand. Some hands will take longer, some hands less time. At the end of the round, the person managing the game (called the Director) tells everyone to move to the next table. More on Duplicate Bridge later.

A bridge round is extra money a company raises between priced rounds. One of the company's current investors will often lead the bridge round, which is an unpriced round of financing.

What is the weakest part of a bridge? there can not be weakest and strongest points in a structure , the mid span is the region where there will be maximum load.

What is a good arr for series B? ›

Our perspective. ICONIQ Growth often begins partnering with companies between $1m and $10m ARR, generally considered Series B investing.

Series B funding can be a great way to take your startup to the next level. But it's important to remember that it's not easy money. You'll need to have a strong plan and track record to secure the funding, and you'll need to use it wisely to ensure that your company continues to grow.

Your financing decisions should be based on your company's specific circ*mstances and needs, as well as market conditions. After closing a Series A round, startups typically wait two years before raising their Series B.

Andreessen Horowitz, General Catalyst and Khosla Ventures were the most-active U.S. investors leading Series A and B rounds globally in the first half of 2024. The three topped a list of 13 investors that made seven or more early-stage investments.

What do investors look for in a Series B investment round? A scalable business strategy, consistent revenue growth, shown traction, and evident market validation are what investors in Series B funds want. They need well-thought-out plans for how the money will be used as well as comprehensive financial estimates.

A lot more earlier stage companies (including Series B) are not going to make it. You got to take some risk to make big money, but the level of risk is elevated and the number of huge outcomes are going to be dramatically lower so that should be a part of the math.

Series B is often led by many of the same characters as the earlier round, including a key anchor investor that helps to draw in other investors. The difference with Series B is the addition of a new wave of other venture capital firms specializing in later-stage investing.

Series B funding can be a great way to take your startup to the next level. But it's important to remember that it's not easy money. You'll need to have a strong plan and track record to secure the funding, and you'll need to use it wisely to ensure that your company continues to grow.