An extension round adds capital to a round the company already raised (a “seed extension,” for example), usually on similar terms. It gives more runway without formally moving to the next stage.
Where in the journey
Same stage as the round being extended.
What the money is for
Add runway or bring in a strategic investor without a full new round.
Common investors
Existing investors, sometimes a new participant.
Watch out for
Can indicate the company isn’t ready for the next stage yet.