Why Extension Rounds Are Venture Capital’s New Normal

The median gap between a startup's primary financing rounds is now two years, according to Ivan Nikkhoo, founder and managing partner of Navigate Ventures, in a Forbes article. That interval is well longer than the venture industry's established 18-month cadence, and it is changing how and when founders raise capital. The article estimates that between 25% and 30% of all seed and Series A rounds are extension rounds, also called bridge rounds.

Extension capital sits between operating progress and institutional re-pricing. It can take the form of an additional SAFE before seed, a seed extension before Series A, a priced A+ round before growth capital, or a late-stage financing paired with secondary liquidity. Carta data cited in the piece shows bridge rounds supplied 16.6% of all venture cash raised in Q2 2025, up from 11.8% a year earlier. The share reached 22.5% at Series A and exceeded 20% at Series D. The article attributes this to a two-speed market: preliminary Carta figures show H1 2026 venture funding rose modestly overall, but seed funding fell from $6.5 billion to $3.8 billion while Series C+ funding climbed from $23.9 billion to $31.8 billion. Half of all venture dollars went to AI companies.

At the later stages, extension capital increasingly overlaps with liquidity. Carta companies ran 396 tender offers in 2025, up 62% year over year. The article notes that bridges add primary capital to extend runway, while secondaries pay existing shareholders, and only the primary portion adds to company cash. Combining the two can fund growth while giving early investors, founders or employees a path to liquidity. The piece also offers four tests for VCs evaluating extensions: genuine evidence of progress, use of proceeds tied to a specific objective, a measurable next milestone within the extension runway, and a credible next capital source. It adds that priced extensions after a Series A generally communicate more clearly and align governance, and cites research on 2019–2021 data finding companies that used SAFEs or notes for bridges were roughly 10 times less likely to reach the next primary round than those using priced equity, a gap the author acknowledges may reflect company quality as much as instrument choice.

The author concludes that the VC market is unlikely to return to a simple 18-month cycle, and that extensions have become a permanent layer between primary rounds.