Warrant
A right to buy company stock at a set price in the future — similar to a stock option, but typically issued to investors or lenders rather than employees.
Quick Answer
How is a warrant different from an employee stock option?
Warrants are typically issued outside the employee equity plan — often to investors, lenders, or partners as part of a financing or business arrangement — while options are specifically employee, advisor, or contractor compensation instruments.
- Warrants usually sit outside the employee option pool
- They're commonly attached to a loan or investment deal
- Both grant the right to buy shares at a fixed price later
The Lovie Advantage
Lovie tracks warrants separately from the option pool, so fully diluted calculations never mix the two incorrectly.
See how this connects to Carve-Out (Management Carve-Out). For the formal definition, see Investor.gov's glossary entry on derivatives.
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