An extension round is an additional financing at the same valuation and on substantially the same terms as the previous priced round. It adds capital and extends runway without setting a new price or going through a full new-round process. It is formally distinct from a bridge round (which typically uses SAFE notes or convertible debt that convert at the next priced round) and from a flat round (which is a new priced round at the same valuation). It is a common pattern in the 2022-2024 venture environment as companies needed more time to grow into their previous valuations.
The structural mechanics: existing investors (and sometimes new investors) commit additional capital at the same price per share as the previous round. T...