Wrnt FAQ for Founders & Partners

The Wrnt FAQ: stock warrants for companies and their partners

What stock warrants are, why companies and their partners use them, and how to be ready before the deal that matters arrives.

Stock warrants let companies and the partners who help them grow share in the upside they create together. Wrnt, as in warrant, is the infrastructure that makes them practical: benchmark the terms, execute the agreement, and manage the position through its life. These are the questions we hear most.

The basics

What is a stock warrant?
A stock warrant gives its holder the right to purchase shares from the issuing company at a set exercise price, under defined terms and within a time limit. Holding a warrant is not the same as owning shares. It is a right to buy them later. Warrants appear in commercial, lending, and advisory relationships, usually alongside cash and not in place of it.

How is a warrant different from options or shares?
A useful shorthand is three channels of equity. Employees hold options. Investors hold shares. Strategic partners and institutions often hold warrants. The first two channels have had dedicated infrastructure for years. The third has mostly run on manual processes, PDFs, and spreadsheets.

Who uses warrants?
More companies than most people expect. Warrants sit inside partnerships such as OpenAI and AMD, Instacart and Safeway, and Walmart and Symbotic, and banks and lenders to the innovation economy have accepted them from clients for decades. What has been missing is a practical way for everyone else to use the instrument.

What is Wrnt, and who is it for?
Wrnt is the system of record for warrant programs: the place a program is set up, agreed, and kept. Setup covers company context, board authorization, model documents, terms and limits, and the approval approach. The agreement stage covers benchmarked terms, a draft on a proven model form, collaboration with your counterparty and counsel, and signature. The ongoing record holds every instrument, document, date, vesting condition, and lifecycle event for as long as the warrant lives.

It serves both sides of the agreement: startups and growth companies granting warrants, enterprises and commercial partners accepting them alongside their fees, banks and lenders running programs across a client base, and investors and funds holding warrants across a portfolio. Organizations that do both see issued and held positions in one view.

Why warrants

What does a warrant add to a commercial relationship?
It puts more than cash on the table. The company keeps more of its cash in the business and can reach partners a cash-only offer would not. The partner gets a stake in the value it helps create, beyond the fee. And because vesting can be tied to delivered outcomes such as revenue, volume, milestones, or integration, equity is earned as the contribution is made.

Warrants do not guarantee an outcome. Their value depends on the terms and on the company's future, and exercise dilutes existing shareholders. That is why terms deserve benchmarking and modeling before anyone signs.

If warrants work, why don't more deals include them?
Because many never get that far. A one-off warrant is an episodic legal event: bespoke drafting, uncertain market terms, board approvals, accounting questions, and then a PDF someone has to remember for ten years. Faced with that, both sides often default to cash. The cost never appears on an invoice. It shows up as upside nobody captured and partnerships nobody proposed.

Lawyers, accountants, and a spreadsheet can carry one warrant. The approach tends to break down at the second counterparty, the first amendment, or the first audit, when someone has to reconstruct what was agreed, what has vested, and what expires when. Typical failure modes include missed expirations, unexercised in-the-money positions, incomplete records, and cap table data that no longer matches the governing documents. For a holder the rule is simpler: an asset you cannot administer is an asset you cannot accept.

Why get ready before the deal

We don't have a partner or a deal in mind. Why start now?
Because the deal that matters rarely gives notice, and the work that makes a warrant possible takes longer than a negotiation allows. A company needs commercial strategy, board authorization, a warrant pool, a model form its counsel is comfortable with, and a view on what terms are reasonable. A firm accepting warrants needs policy, approval authority, an accounting position, and a way to administer what it holds.

Done in advance, that work turns a warrant into a term you can offer strategically in the right conversation. Attempted mid-negotiation, it is often the first thing dropped, and the deal reverts to cash.