# Bridge Round Financing Model Analyse bridge financing with realistic conversion scenarios at different Series A post-money valuations, founder dilution, and cap table projection through the priced round. - Canonical: https://finamodel.com/templates/bridge-round-financing-model - Excel download: https://finamodel.com/templates/bridge-round.xlsx - Category: Corporate Finance - Model type: Fund / Waterfall - Difficulty: Beginner - Audiences: Founders & operators, Investors & analysts, Founders, Angel investors, Venture capitalists, Cap table advisors - Tags: financing, convertible note, SAFE, dilution, cap table ## Overview 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's included - 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 - Convertible note and SAFE instrument terms: discount, valuation cap, interest - Conversion scenarios at different Series A post-money valuations - Resulting ownership percentages for founders, bridges, and Series A investors - Dilution impact and resulting ownership by scenario - Interest accrual and other mechanics (pro-rata rights, information rights) - Cap table projection through conversion and Series A close ## 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. ## Built for bridge financing decisions Use this model when discount, valuation cap, and conversion mechanics drive negotiations with bridge investors. ## Multi-instrument support A useful bridge model handles convertible notes and SAFEs side-by-side with different terms, discount rates, and caps. ## Cap table transparency This shows founder, seed, and bridge ownership through multiple rounds so dilution sensitivity is clear before signing. ## Built for bridge financing decisions Use this model when discount, valuation cap, and conversion mechanics drive negotiations with bridge investors. ## Multi-instrument support A useful bridge model handles convertible notes and SAFEs side-by-side with different terms, discount rates, and caps. ## Cap table transparency This shows founder, seed, and bridge ownership through multiple rounds so dilution sensitivity is clear before signing. ## Features - **Conversion scenario matrix:** Model conversion results at different Series A post-money valuations; see founder dilution and ownership at each price point. - **Multi-instrument support:** Handle convertible notes and SAFEs with different terms, discount rates, and valuation caps. - **Detailed cap table:** Track founder, seed, and bridge ownership through multiple rounds. ## Use cases - **Bridge financing structuring:** Decide optimal note terms: discount rate, valuation cap, and interest to balance founder and investor interests. - **Series A planning:** Forecast cap table and dilution if you close Series A at different price points. - **Investor communication:** Show bridge investors how their conversion will work and realistic dilution scenarios. ## Frequently asked questions ### 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. ## Related templates - [Cap Table Management Model](https://finamodel.com/templates/cap-table-model) - [Pre-Seed Startup Financial Projection Model](https://finamodel.com/templates/pre-seed-pitch-model) - [Venture Capital Fund Model](https://finamodel.com/templates/venture-capital-model)