Definition
Pre-IPO Bridge Financing – A short-term debt instrument, common in the run-up to a startup's IPO, that converts into equity (often at a discount to the IPO price, or upon a qualifying financing event) rather than being repaid in cash. It sits on the balance sheet as a liability — and accrues interest expense — right up until the triggering event, so a large convertible-note balance can make a company issuing them into its own IPO look far more leveraged in its last pre-IPO quarter than it will once the notes convert to equity around listing. Found In: Balance Sheet (non-current liabilities), Notes to Financial Statements (debt/financing)