Warrant

Definition

A warrant is the right to buy shares at a fixed price in the future, commonly granted to lenders in venture debt deals or partners in commercial agreements.

Wie es im Fundraising vorkommt

Venture debt warrants typically cover shares worth a small single-digit percentage of the loan, the equity kicker that compensates lender risk.

Häufig gestellte Fragen

How do warrants differ from options?

Mechanically similar; warrants are issued to outside parties (lenders, partners) while options compensate employees from the pool.

Do warrants dilute founders?

Yes, when exercised; model outstanding warrants in fully diluted share counts.

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