10/20/2026
Existing investors often offer to fund a year-end bridge round. When their partners also serve on the board, how the round is offered can matter as much as its price.
Pattern A: The bridge is open only to the investors whose directors approve it. It can close quickly, but the approving directors are effectively deciding on their own investment, and a fair price may not resolve that conflict.
Pattern B: The same terms are offered to every stockholder on a pro rata basis. It can take longer, but every holder has the same opportunity to invest. It still does not fix terms that may favor the insiders.
When time permits, Pattern B may be the stronger option. For either structure, the company should give attention to the approval path before the term sheet is signed.
General information only, not legal advice.