> In my feeling, at least half of the 38% would be explained by VCs raising bridge rounds for their existing portfolio companies.
Heh. That sounds like a sunk cost fallacy on the VCs end.
Either an investment is a good deal or not.
Heh. That sounds like a sunk cost fallacy on the VCs end.
Either an investment is a good deal or not.
IMO bridge rounds aren’t driven by the investor’s fear of a markdown - they’re driven by the belief that the founder+team can figure it out and get to the next stage. When risking even more cash on a company that isn’t an obvious winner, you really have to believe in the team.
So a bridge round isn't about "throwing good money after bad", it's about VCs still believing in the business and not wanting to have to sell another part of the company on the cheap.