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Startup Funding Espresso – How To Calculate Warrant Coverage
How To Calculate Warrant Coverage Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. A warrant is the right to buy a company's stock at a specific price or range over a certain time period. The warrant acts like an option, but it issues stock, which dilutes the cap table. Founders raising funding offer warrants to incentivize investors to fund the company. Warrant coverage is the number of warrants an investor receives based on the size of their investment. It's typically stated as a percentage such as 5% or 10%. Here's how to…
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