If you are a startup seeking venture capital investment, it's important to understand the different types of investment available to you. In this blog post, we will discuss bridge round investments and when startups should seek angel funding. Thanks for reading!
A bridge round investment is a type of venture capital investment that is typically used to boost a startups valuation by achieving milestones. This type of investment is usually sought by startups that are preparing for a new round and need additional funding to reach their goals. Bridge rounds can be difficult to find investors for, but they are an important option for startups that need additional capital to fund their new and more audacious goals.
However, the term "bridge round" has been tainted for some time, particularly because of some startups that sought this type of investment because of poor management and lack of a business plan. As a result, some VCs have shied away from this type of investment altogether, but this is not the case for most bridge rounds.
So don't think that only because a startup wants (and pay attention that I did not say needs) an investment before the next big round (a series B, for instance), that the startup is in a dire situation. Au contraire, this type of startups are usually the most interesting ones: they have demonstrated enough traction to be followed by good VCs and, more importantly, they have a sense of what it will take to get to the next level.
When it comes to an Angel round we are usually talking about a very early stae, that's he money you'll raise if you're not able to run the MVP by yourself.
If you are seeking angel investment, it is important to remember that angels are typically high net worth individuals who invest their own money and that not all angel investors are created equal. Some angels may be more interested in the technology or product than the business itself. Others may be more interested in the team and their ability to execute on the vision. It is important to do your research and understand what each potential angel can bring to your business.
Good tip: don't accept the first offer that you get. You never know if another angel might be willing to give you a better deal, not only financially speaking, but also in terms of the value they can bring to your business.
We hope that this blog post has given you some insights into venture capital investments and what to expect from a bridge round investment. If you are seeking angel funding, remember to do your research and understand what each potential angel can bring to your business. Thanks for reading!