Bridge Round Financing Model
Corporate Finance Financial Model (Free Excel Download)
Evaluate bridge financing with conversion terms, accrued interest, valuation caps, discount mechanics, dilution, and investor proceeds across funding and exit scenarios.
professionals from Deloitte
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About this model
A bridge financing model evaluates convertible notes and SAFE instruments by projecting conversion scenarios at different Series A post-money valuations, calculating resulting ownership percentages for founders, bridge investors, and new series investors, and showing dilution impact on each holder. The model answers how much the bridge round is worth to the convertible investors (in terms of discount and valuation cap), what the pro-forma cap table looks like at multiple Series A price points, and how founder ownership evolves through conversion.
Convertible instrument terms (discount, valuation cap, interest rate) define the conversion mechanics: at Series A, the note converts at either the post-money valuation times the discount (e.g. 80% of price per share) or the valuation cap divided by the fully-diluted share count, whichever is more favourable to the investor. Each conversion scenario is modelled by varying the Series A post-money valuation (e.g. $10M, $15M, $20M, $25M), calculating the resulting price per share, then determining how many shares the convertible investor receives. The cap table projection shows pre-financing fully-diluted shares (including employee option pool), each instrument's conversion result, new Series A investment, and pro-forma ownership percentages.
Startup founders, venture investors, and company counsel use bridge models to negotiate terms, understand dilution sensitivity, compare the value of different bridge terms (higher discount vs. lower valuation cap), and ensure the bridge structure doesn't create unexpected outcomes if Series A pricing comes in hotter or colder than expected.
What every model includes
Live formulas, no hardcoded values
Outputs are driven by live formulas, so the workbook updates from its assumptions instead of relying on hardcoded results.
All assumptions in one tab
Inputs are clearly marked in the Assumptions tab and separated from calculations, making it clear what to change and what to leave intact.
Statements always balancing
For integrated-statement models, the balance sheet, cash flow, and supporting schedules tie through properly.
Distinct schedules for clarity
Debt, working capital, taxes, and cash flow can get messy quickly. We group calculations in clear schedules, not across disconnected tabs.
No hidden macros or external links
There are no unexplained external workbook links or macros to undermine auditability or portability.
Changes flow through the model
Update a key driver and see the impact carry through the forecast, financing, and return outputs. We never use hardcoded numbers in formulas.
What's inside the Bridge Round Financing Model
- Convertible note and SAFE terms: discount, valuation cap, interest
- Conversion scenarios across Series A post-money valuations
- Resulting ownership for founders, bridges, and Series A investors
- Dilution impact and ownership stack by scenario
- Pro-forma cap table through conversion and Series A close
- Interest accrual and other mechanics (pro-rata rights, information rights)
Bridge Round Financing Model: How the Template Works
This bridge round financing model helps founders, board members, and lead investors test convertible note or SAFE bridges. It projects runway with and without the bridge, calculates per-investor conversion at a future priced round, attributes founder dilution to the bridge alone, and tests a maturity repayment scenario if the next round fails to close.
Operating drivers and key toggles
The model is driven by seven input groups covering instrument type, conversion toggle, interest, valuation cap, discount, ESOP top-up target, and next round timing and size. You can switch between a Note and a SAFE: a SAFE disables interest accrual, while conversion mechanics remain the same.
- The conversion toggle decides whether the bridge converts at the priced round or, for a Note, repays in cash at maturity. For a SAFE with no conversion, holders are wiped.
- The bridge valuation cap sets a global cap, but each investor can override it, and the lower cap applies.
Calculation flow from inputs to cap table
Each investor row carries an amount, optional cap override, discount, close month, and instrument type. The model first calculates months outstanding from close to the next round month.
- Maturity value is principal for a SAFE, or principal plus simple interest for a Note. Two prices are compared: a cap price from the effective cap divided by total pre-money shares, and a discount price from the next round pre-money per share less the investor discount.
- The lower price is used to compute conversion shares. Those shares then feed into the post-Series A fully diluted share count, together with existing shares and an ESOP top-up.
Series A new shares are sized so that new investors receive the raise divided by post-money valuation.
Outputs and practical interpretation
The cover sheet presents runway with and without the bridge, the cash gap to the next round, founder ownership after Series A, founder dilution attributable to the bridge, and a base-case bridge IRR. The runway comparison shows how many months the bridge extends the cash runway, while the cash gap indicates the minimum bridge size required.
- Founder dilution from the bridge isolates the difference between the live model and a counterfactual where no bridge closed. A conversion cap table, a bridge debt roll-forward, and a breakeven summary provide further detail.
- The no-conversion scenario surfaces the outcome if the priced round does not occur.
Model boundaries and practical use
This template handles one bridge and one priced round. It does not allocate use of proceeds per investor, model pro-rata rights, apply MFN clauses to SAFEs, or accommodate multiple priced rounds.
- The founder dilution sensitivity grid uses a non-iterative ESOP top-up approximation, within about half a percentage point of the exact answer at default inputs. Where investors close in widely different months, per-investor figures are more accurate than the summary.
- A set of validation checks monitors ownership totals, cash minima, and conversion reconciliation. The public download is a values-only preview, not a live calculation tool.
Formatted to IB standards
Named theme colors repaint the whole workbook in one click, on top of an investment-banking structure with clear input, output, and cross-sheet reference styling - brand-ready, institutional-grade, and fully auditable.
Created by ex-finance professionals
Hey, I’m Alex and I created Finamodel.
Over my years in the finance industry I kept building the same models over and over again. Same structure, same assumptions, different logo. So I started building frameworks to turn them into clean, reusable templates.
Every model here is one I’d actually use for a client, and I personally vet each one before it goes up.
I’m not an expert in every industry, but I’ve built enough models to know what belongs in one. And when something is completely foreign to me, I reach out to my network for experts to work on our models with us.
Having a template library on hand cuts a first build from hours to minutes.
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Frequently asked
What is a bridge round financing model?+
It is a model that projects convertible note and SAFE conversion at Series A and shows the resulting cap table and dilution outcomes.
What is a valuation cap?+
A valuation cap sets a maximum post-money valuation at conversion, giving bridge investors downside protection if the company valuation rises sharply.
What is a typical discount rate?+
Discount rates typically range 15–30%. A 20% discount means the bridge investor converts at 80% of the Series A price.
Do SAFEs and convertible notes have different mechanics?+
Yes. SAFEs have no interest or maturity; convertible notes accrue interest and have a maturity date. SAFEs are usually more founder-friendly.
Can I see dilution at different Series A prices?+
Yes. The model runs a scenario matrix across post-money valuations and outputs founder, bridge, and Series A ownership at each price point.
Have more financial modelling questions? Contact us
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