Startup Terms Glossary
What is a Perpetual Warrant?
When a security is offered to a buyer that allows them to buy stock at a specified price at some point in the future, it is called a warrant. Standard warrants are usually offered in conjunction with some other stock option and these warrants have an expiration date sometime in the future. Perpetual warrants are unique because they do not specify an expiration date, so their holder could theoretically hold their option forever.
Perpetual Warrant Examples
Some key considerations of a perpetual warrant include:
- Point 1. Usually offered to “sweeten” a less attractive deal
- Point 2. Offered by companies, not investors or brokerages
- Point 3. Strike price is usually higher than market value
This page also discusses a perpetual warrant.
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