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Warrants

Best practices on working with warrants

Method 1: Adding a new round for Warrants

Add an New Round to account for the warrants.
  • Security Type: Other
  • Investment Amount: Price paid for warrants exercise
  • Round Size: Same as investment amount
  • Valuation: The implied valuation of the company at the exercise price
You may also choose to enter data in the Share Mode where you can specify
  • Share Price: Exercise Price
  • Shares Purchased: Shares purchased via warrants
  • Total Shares Owned: Total shares owned post-warrants exercise
  • Total Shares Issue: Shares purchased via warrants
  • Fully Diluted Shares Outstanding: Shares outstanding at the company after warrant exercise
The aggregate valuation of the company will reset to the exercise price, so the next step is to add a Valuation Update event to recalibrate the aggregate valuation to the current aggregate valuation.

Method 2: Ownership Update

Alternatively, you can also simply add an Ownership Update event to reflect the new ownership in the company post-warrants. In this approach the price paid for the warrants is not captured in the invested amount into the company.