You should raise your bridge round from your current investors

You’re running a startup. Things are getting a bit tight, and you need more cash to keep things moving. Instead of hitting the streets and wooing new investors, you might want to consider raising a bridge round from your current investors. Here’s why.

They already know you are crazy

New investors are like first dates. You’ve got to put on your best suit, hide your quirks, and pretend you’re totally normal.

Current investors? They’ve seen your crazy. They know about the time you pivoted three times in one week, or when you launched that "brilliant" feature that flopped. They get it, and they’re still here.

They know the highs and lows, and they’re more likely to trust your vision (even if it sounds a bit bonkers sometimes).

Less time pitching, more time building

Pitching to new investors is like trying to sell ice to Eskimos. You’ve got to prepare decks, practice pitches, and sit through countless meetings.

With current investors, you can cut through a lot of that nonsense. They already know your story, your team, and your market. This means you can spend less time pitching and more time actually building your business.

Plus, they won’t roll their eyes when you say, “Let’s pivot again!”

Speed matters

In startups, speed is everything. New investors often take their sweet time to make decisions. They’ll drag you through due diligence hell, ask for more data than the NSA, and make you wait forever for a “yes” or “no.”

Current investors can move much faster. They’ve got skin in the game and want to see you succeed (or at least not crash and burn). A quick bridge round can give you the runway you need to hit your next milestones without getting bogged down in investor drama.

Avoiding the valuation trap

Raising a new round with fresh investors can lead to tricky valuation conversations. Everyone’s got an opinion, and before you know it, your company’s worth might look like a rollercoaster ride.

Your current investors have already agreed on your worth before. It’s easier to agree on terms that won’t make you feel like you’re giving away your firstborn child. That takes us to...

Better terms

New investors are like car salesmen. They’ll try to get the best deal for themselves, which often means worse terms for you.

Current investors are usually more aligned with your long-term goals. They want to see you succeed and aren’t just looking for a quick buck. You’re more likely to get terms that are founder-friendly and won’t leave you feeling like you’ve sold your soul.

Keeping the faith

Fundraising from new investors can sometimes send a signal that your current investors aren’t interested in backing you anymore. This can create doubts in the minds of new potential investors.

Raising a bridge round from your current investors shows that they still have faith in you. It’s a vote of confidence that can be invaluable as you continue to grow.

Trust and transparency

You’ve already built a relationship of trust with your current investors. They know you’re not just in it for the short-term gain. They understand your long-term vision and are more likely to give you the benefit of the doubt when things get rocky.

With new investors, you’d have to start building that trust all over again, and who’s got time for that?

So what then?

Raising a bridge round from your current investors can be a lifesaver for your startup. They know you, they trust you, and they can move fast. Plus, you avoid the drama of new valuations and get better terms. So next time you need a quick cash injection, don’t overlook the folks who are already on your side.

If you liked this post, let’s catch up over a coffee. ☕️