Warrants
You may come across the term warrants in a terms sheet. Warrants are a type of security that gives investors the option to buy more stock over a designated time frame, at a specific price. \xa0 Three parameters define the details of a typical warrant clause: the term, the coverage, and the price. \xa0 The term sets the window of time the investor has the option to exercise the warrant. \xa0 The coverage sets the number of shares the investor is entitled to buy. \xa0 The price sets the price at which an investor can purchase the shares. This is typically the same as the current price. \xa0 Warrants are used to \u2018sweeten\u2019 the deal by enabling an investor to buy more shares later. \xa0 Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. Let\u2019s go startup something today.