Bridge Loans serve as temporary financial lifelines for startups navigating transitional phases between funding rounds or critical milestones. They provide immediate cash to cover payroll, vendor contracts, and operational costs, ensuring that growth and momentum continue uninterrupted. Because of their temporary nature, Bridge Loans often carry higher risk, potentially higher interest rates, or include conversion discounts and warrants. Legal safeguards play a crucial role: Non-Disclosure Agreements (NDAs) protect sensitive company information shared during loan negotiations; Option Pools ensure employee retention and incentive alignment; and Clawback provisions enforce accountability for performance-based distributions. Collectively, these mechanisms create a framework balancing short-term survival with long-term governance, equity management, and trust, allowing startups to navigate uncertainty responsibly while preserving growth potential.opt
