Bridge Round Dilution Model Template
Three documents and two sheets, including the model that converts four bridge structures through one identical Series A and prices the difference.
Free download · No account needed
A bridge is priced twice. Once on the day it is signed, in terms nobody can evaluate yet, and once at the next round, in a cap table nobody modelled at the time. The gap between those two events is usually about a year, which is exactly long enough for the second pricing to arrive as a surprise. This pack moves it forward to the day of the first one, and the move is arithmetic rather than judgement.
Halyard Systems is an invented company with 11,000,000 shares outstanding and five months of cash. It raised 1,800,000 and closed a Series A fourteen months later at 10,000,000 on a 40,000,000 pre-money. Run the same cheque through four structures and the founders end at 38.53, 39.02, 39.50 or 39.79 percent. The spread is 1.26 points, which is 627,522 at that round, or 34.9 percent of the money the bridge raised, decided entirely by which paper got signed.
The second number is the one nobody adds up. A Series A fixes its option pool as a percentage of post-money and funds it from the pre-money, so a bridge conversion enlarges the pool requirement as well as taking its own slice. Halyard's note converted into 1,804,000 shares and forced a further 318,353 pool shares into the same pre-money. The documents state the first figure. Both come out of the founders and the seed holders.
What's in the pack
Dilution Impact Across Scenarios
Four structures for the same cheque, converted through one identical Series A, with the conversion price derived rather than taken from the term sheet. Six blocks, including founder percentage at four different round prices.
Runway Extension Model
Twenty-four monthly rows with cash on both paths, the accruing balance on any instrument that carries interest, and the maturity date marked. It reports the size the schedule implies next to the size being discussed.
Terms Comparison
The four structures in prose, including why a larger post-money cap beats a smaller pre-money one, what fourteen months of interest bought in shares, and the round price at which a negotiated discount would start to matter.
Bridge Rationale
The size the model implied, the size actually raised, and the constraint that explains the difference. Written while the reasoning is still available, because the usual artifact of a bridge is one signature page.
Existing Investor Communication
The ask on one page, the five questions that come up every time with answers containing numbers, and the order to hold the conversations in. Existing holders talk to each other, usually before they talk to you again.
One rule the space enforces
No dilution figure gets reported for a bridge without the pool shares the conversion forced, as a separate column rather than folded into a total. Quoting only the conversion understates the cost by about a sixth.
How to use it
- 1
Open in River, or download it
Take the blank Word and CSV files with no account, or install the pack in River and hand it your cap table, your bank balance and the terms on offer.
- 2
Run the runway schedule before the terms
Find the month cash runs out on each path and put the expected close beside it. A bridge that ends before the round closes is the wrong size, and no instrument fixes that.
- 3
Convert everything through one identical round
Hold the new money, the pre-money valuation and the pool percentage constant across every structure. Add a priced extension even if nobody offered one, because it is often the best outcome.
- 4
Report the spread, not a recommendation
Founder percentage under each structure, the difference between best and worst in points, and that difference in dollars at the round's post-money valuation.
Frequently asked questions
Is this template free?
Yes. Three documents and two sheets download as Word and CSV files with no signup and no credit card. Edit with AI is the optional path where the agent runs your own instruments against your own cap table. The rest of the library is at the template index.
What format are the downloaded files?
Word documents (.docx) for the Bridge Rationale, Terms Comparison and Existing Investor Communication, and CSV (.csv) for Dilution Impact Across Scenarios and the Runway Extension Model. They open natively in Word, Pages, Google Docs, Excel, Numbers and Sheets.
Does it tell me which instrument to sign?
No, deliberately. It prices each one and gives you the difference. The best structure for founders in the worked example is a priced extension, which needs a lead investor and four more weeks, so the company signed a note instead. Where the gap is small enough, the non-dilutive options belong in the same comparison.
Why does the 20 percent discount not matter?
Because an instrument with both a cap and a discount converts at whichever price is lower. The cap price here is 1.0909 and the discount only wins below a round price of 1.3636. The round came in at 2.7521, so the note converted 60.36 percent below it. Modelling both prices is what the SAFE and note conversion model does for instruments you have already signed.
What is the difference between a pre-money and a post-money cap?
A post-money cap fixes the investor's percentage, and Y Combinator, which wrote the instrument, designed it so the ownership sold is calculable at signing. A pre-money cap fixes a price instead and lets the percentage fall out afterwards. They are different instruments, not the same term with different numbers.
Do we need lawyers for the conversion itself?
Yes, and there is one mechanical item worth checking early. The converted shares have to sit inside the authorised count, and increasing authorised stock in Delaware is a charter amendment requiring a board resolution and a stockholder vote. Confirm the number before the term sheet rather than during the closing.
Where does the output go next?
The converted rows land in a reconciled cap table, the instruments become numbered items in the startup data room checklist, and the new strike price for outstanding options comes out of the 409A document checklist.
Price the conversion before you sign it
Download the blank pack as Word and CSV files, or open it in River and have it run your terms plus a priced extension through the same Series A.
Edit with AI