Thiruvananthapuram: Startups raising bridge funding must focus on clearly defined growth objectives, financial discipline and strategic execution rather than using additional capital merely to extend their survival, investors said during a panel discussion at Huddle Global 2026 in Thiruvananthapuram on Friday (November 13).
Addressing the Bridge Round Trap between seed funding, Series A and subsequent fundraising stages, investors stressed that founders must demonstrate measurable progress and adaptability before seeking their next round.
The discussion, titled ‘The Bridge Round Trap: Surviving Between Seed, Series A, and Beyond’, was held on the second day of the three-day startup festival organised by the Kerala Startup Mission (KSUM). The session was moderated by Poornima Nayak, VP, Investments & Finance, Ventana Ventures.
The panel brought together investors from Merak Ventures, Mars Growth Capital, Beyond Next Ventures and Mela Ventures to discuss the challenges startups face while raising bridge capital, managing limited financial runway and preparing for their next fundraising milestone.
Bridge Funding Is Not Always a Negative Signal, Says Merak Ventures
Pranav Sanghvi, Director at Merak Ventures, said bridge rounds should not automatically be viewed negatively, particularly when startups encounter execution challenges or external factors such as macroeconomic headwinds that affect their growth trajectory.
“Bridge rounds are not necessarily negative from an investor’s perspective. They can be justified when a startup faces execution risks or deviates from its original growth trajectory due to factors beyond its control,” he said.
However, Sanghvi cautioned founders against accepting capital without evaluating its quality and strategic value. He emphasised that the availability of funding alone should not determine a startup’s decision to raise a bridge round.
“Not all money is good money, and not all capital is of equal quality,” he said.
His remarks highlighted the importance of evaluating investors and funding terms rather than treating every bridge round as an opportunity that founders must pursue.
Mars Growth Capital Highlights the Need for Clear Objectives
Navas Ebin Muhammed, CEO of Mars Growth Capital, said bridge funding must be connected to a specific business objective instead of being used simply to extend a startup’s financial runway.
Discussing the changing venture capital environment, Muhammed noted that the ecosystem was witnessing fewer funding deals, although investments were becoming larger in companies demonstrating strong traction and scalability. He also pointed to India’s attractive exit environment for investors.
According to him, startups can deploy bridge capital to enter new markets, acquire customers or pursue expansion opportunities. Depending on their business requirements, founders could also consider combining equity financing with debt.
“It’s not always about survival or extending the runway. Founders must be clear about what they want to achieve with the additional capital. The rationale will differ across businesses, particularly in sectors such as technology, where companies may need more time to take products to market,” Muhammed said.
The discussion on the Bridge Round Trap underscored that raising additional capital is only one part of the fundraising process. Startups must also establish a credible deployment strategy and demonstrate tangible progress before approaching investors for their next round.
Beyond Next Ventures Identifies Three Factors Investors Evaluate
Jay Krishnan, Partner and Head of Investments at Beyond Next Ventures, said investors generally examine three factors while evaluating bridge funding opportunities: technology risk, the founder’s ability to learn from previous mistakes, and changes in market conditions.
He explained that when a startup has limited financial runway, investors assess whether its founders have made appropriate strategic pivots to address technology-related challenges.
The ability of founders to recognise mistakes, respond to changing circumstances and adapt their business strategies becomes particularly important during this phase, he added.
“We do not want to be in a situation where the pace of change in the external environment is faster than the startup’s ability to adapt. Otherwise, the company risks constantly playing catch-up,” Krishnan said.
His observations highlighted the importance of adaptability in navigating the Bridge Round Trap, particularly for startups operating in sectors where technology and market conditions can change rapidly.
Mela Ventures Advises Startups to Prioritise Spending
Viju George, Investor and Partner at Mela Ventures, said startups experiencing financial constraints must categorise their expenditure into three areas: essential costs, growth investments and discretionary spending that can be deferred.
He advised founders to prioritise keeping their businesses operational and strengthening existing products instead of distributing limited financial resources across multiple new initiatives.
George also highlighted the role investors can play in helping startups rationalise expenditure and restructure teams to align costs with immediate business requirements.
Citing an example, he said a company with 60 employees was scaled down to 24 to bring its workforce in line with its immediate business needs.
Although such decisions can be difficult for founders, George said they can significantly improve a startup’s financial runway.
He explained that workforce rationalisation and cost restructuring could potentially extend a startup’s runway from six to nine months to as much as 15 months.
This additional time could give the company a better opportunity to secure its next funding round from a position of strength rather than approaching investors under immediate financial pressure.
IvyCap Ventures Calls Keralam’s Startup Ecosystem a Model for India
Separately, in his keynote address, Vikram Gupta, Founder and Managing Partner of IvyCap Ventures, described Keralam’s startup ecosystem as a model for the rest of the country.
He attributed the ecosystem’s growth to the state’s skilled human resources, NRI investors, research institutions and entrepreneurial opportunities.
Gupta said Keralam was attracting significant investments and had several startups supported by the state government, distinguishing its startup environment from those in other states.
He also identified several sectors where the state has considerable potential, including healthtech, climate tech, food and agriculture, marine technology and enterprise technology.
According to Gupta, Keralam’s progress in the startup sector could serve as an inspiration for other states seeking to strengthen their entrepreneurial ecosystems.
