Middle Market Deals and how to buy, sell and raise capital from $5 to $500 million

Bridge Loan:  A bridge loan in middle market parlance is typically a loan that is intended to help close the gap between current financing needs and a future round of equity financing.

Some angel investors are now using forms of convertible notes styled after common forms of bridge notes to provide seed stage capital to startups.  Later in their growth cycle, a bridge note may be used between venture capital rounds or as a bridge to an IPO, in which case the investment bank providing the underwriting will likely provide the bridge financing.

Some common features of bridge notes are that they typically convert to equity in the next round of equity financing.  Frequently a premium of 10 to 25% (I've heard of 40% but never seen it) is applied to the conversion such that the lender in the bridge gets better terms than the equity investors who fund the equity round.

In the absence of an equity round, the note may convert to equity punitively or simply become due and payable.

You may want to see what Investopedia says.