Warrant

A right to buy a set number of a company's shares at a fixed price before an expiry date, often issued alongside loans or other investments.

Example

Warrants to buy 50,000 shares at 1.00 are worth 100,000 if the shares reach 3.00.

Important

Warrants add to fully diluted share counts even though they are not yet shares.

Related terms

• Venture Debt — Loans made to venture-backed startups by specialist lenders, typically alongside or after equity rounds and often with warrants attached.
• Fully Diluted Shares — The total number of shares that would exist if all options, warrants and convertible instruments were converted into shares.

Lessons that explain it

• Every instrument answers one question differently: what happens if it goes badly — Warrants give the right to buy shares at a set price. Venture debt is a loan that ranks ahead of equity and often comes with warrants. In a poor outcome, the order of claims decides who recovers anything. (11 min)

All 578 terms in the Investing glossary