Mezzanine Financing
Categories: Bonds
The mezz floor in a hotel is kinda neither here nor there. It's in the middle. Above the lobby, but not really a full floor.
Mezzanine financing is kinda the same thing. A startup raised $4 million on $8 million for its first round. Then it raised a B round of $10 million and a C round to raise $22 million. It's not ready for it's IPO fundraising round. It needs a mezzanine round to bridge that gap until it's ready to go public (big enough, profitable enough, powerful enough, worth the hassle, and needing public "currency").
So mezz financing is a kind of bridge investment after the C round or D or E or whatever...but is separate and almost always before an IPO.
When you hear, "Third floor, lingerie," you know you've gone too far.