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Definition of Bridge Financing

For a startup, a bridge financing is a short-term loan or an equity investment that is used to help the company get from one point to another, usually until it can secure longer-term funding or achieve a specific milestone. These bridge loans are often provided by investors or venture capital firms and are typically structured as convertible notes (which convert into equity at the next financing round) or as short-term loans to be paid back within a specific timeframe.

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