A warrant is a promise about the future written down today, and a warrant agreement template UK startups and investors reach for is how that promise is made precise. A warrant gives its holder the right, but not the obligation, to subscribe for newly issued shares in a company at a fixed price, on or before an expiry date. Warrants turn up in venture debt, in bridge rounds, as a sweetener alongside an investment, or as a reward to an adviser or partner, and because they involve a company issuing new shares at a price fixed now for exercise later, the mechanics matter a great deal. This guide explains what a UK warrant agreement should cover and how to draft one from vetted clauses in 99 Data Rooms, with a clear caveat. Warrants engage company law and have real dilution and tax consequences, so this template is a starting point and specialist review is recommended before you use it. This is general information, not legal or financial advice.
The people who use warrants are startups issuing them, founders negotiating them, and investors or lenders receiving them. The reason to get the document right is that a warrant is a commitment to issue equity in the future, and vague or inconsistent terms, on price, timing, or what happens in a funding round, can cause genuine problems when the warrant is exercised, often years later and under pressure. Because a warrant reshapes the cap table, it sits close to the founder equity arrangements and the investor disclaimer that accompany a raise.
What a UK warrant agreement should cover
The core terms define the right itself: how many shares the warrant covers (or how that number is calculated), the class of shares, the exercise price per share, and the exercise period, the window during which the holder can exercise, ending on the expiry date. Precision here is everything, because the whole point of a warrant is that the price is fixed today for shares issued later, so any ambiguity about the number of shares or the price undermines the instrument.
The exercise mechanics are the next essential piece. The agreement sets out how the holder actually exercises, the notice they must give, how they pay the exercise price, and how and when the company issues and registers the new shares. It should deal with partial exercise if that is allowed, and with what happens on expiry if the warrant is not exercised. Alongside this sit the anti-dilution provisions, which protect the holder's economic position if the company issues shares in ways that would otherwise erode the value of the warrant; these adjustment mechanics can get technical quickly, which is one of the main reasons a warrant is a document to have reviewed rather than simply filled in and signed. Note too that issuing the shares on exercise engages the company's share-allotment machinery under the Companies Act 2006 (see Sources below), so the directors' authority to allot and any pre-emption position need to line up.
It is also worth recording how the warrant sits alongside the rest of the cap table, because a warrant is a future claim on equity that everyone modelling the company's ownership needs to know about. Fully-diluted cap tables should reflect outstanding warrants, and an investor doing diligence will expect to see them, so a clearly documented warrant that is easy to locate is part of keeping your ownership picture honest. In practice the allotment on exercise is usually backed by a shareholders' written resolution authorising the directors, which is why the two documents are best kept together.
A complete warrant agreement also addresses the events that commonly overtake a startup: what happens to the warrant on a further funding round, a share reorganisation, or a sale of the company, and whether and how the warrant can be transferred. It will usually include warranties from the company about its capacity to issue the shares, and provisions on notices and governing law. Because warrants touch share capital, dilution and tax, and because the anti-dilution and corporate-event provisions are genuinely intricate, this is squarely a document for professional review before use. It is general information, not legal or financial advice.
How to draft one in 99 Data Rooms
In the 99 Data Rooms drafter, the "Legal Drafting" feature, the Warrant Agreement sits in the "Commercial" cluster of the template library. As with everything in the library, the assistant selects vetted England and Wales clauses by ID from your answers and assembles the document; it does not invent the exercise or anti-dilution wording itself. Vetted clauses, assembled, which gives you a coherent, current baseline for an instrument that is easy to get subtly wrong.
You can open the template or describe the deal in plain words, "warrant over 50,000 ordinary shares, exercise price £1, five-year term, standard anti-dilution", and the assistant assembles the draft with the exercise mechanics and anti-dilution provisions in place, saving it free to keep. Given the consequences, the drafter is explicit that this is a starting point: get it reviewed by a specialist before you issue it, particularly the anti-dilution and corporate-event terms. This is general information, not legal or financial advice.
From draft to signed, with the record kept properly
Drafting the warrant inside 99 Data Rooms keeps a genuinely important instrument in one controlled place rather than as an attachment that gets lost between an email and a lawyer's inbox, which matters for a document that may not be exercised for years and needs to be found intact when it is. Once the draft is ready, you share it with the holder as a tracked, revocable link, gated behind a verified email and a one-time code so you know the right party is opening it. Page-by-page analytics show whether they have read it and how long they spent, distinguishing a raw visit from a verified viewer who passed the gate, reasonable diligence for a document of this weight.
When both sides are agreed, you send it for signature in the browser. The parties sign in order, you can prompt a straggler with a reminder, and the executed PDF returns with an audit certificate recording who signed, when, their IP, intent to sign, and a SHA-256 fingerprint, a clean, dated, tamper-evident record you will be glad of years later when the warrant is exercised. Note that some instruments are executed as deeds, which carry extra formalities, so check how your warrant should be executed; electronic signatures are admissible for most commercial documents in England and Wales, with exceptions such as deeds, wills, land transfers and lasting powers of attorney (see Sources below), and that is general information rather than legal advice. The signed document files itself in the room where the company can find it, and access stays revocable. Drafted, shared, tracked and signed, one document, kept under control from issue to exercise.
Draft your warrant agreement for free
You can draft a warrant agreement from vetted England and Wales clauses in 99 Data Rooms, keep the draft, and share or sign it in the same place, then keep the executed, tamper-evident record safe until it is exercised. The free tier is genuine, not a trial: three rooms, twenty-five active links, forever, no card. The product is in beta and warrants are consequential, so treat the draft as a starting point and get specialist review before use, but the path from "we're issuing a warrant" to a signed, well-kept instrument already works end to end. Start for free. General information, not legal or financial advice.
Sources
- Allotment and issue of shares on exercise of a warrant, and directors' authority to allot: Companies Act 2006, https://www.legislation.gov.uk/ukpga/2006/46/contents
- Shareholder authority for share allotments where required: written resolutions under Companies Act 2006, Part 13, Chapter 2, https://www.legislation.gov.uk/ukpga/2006/46/part/13/chapter/2
- Electronic signatures, execution of deeds and their formalities in England and Wales: Law Commission, Electronic execution of documents (2019), https://lawcom.gov.uk/project/electronic-execution-of-documents/ ; HM Land Registry Practice Guide 82, https://www.gov.uk/government/publications/electronic-signatures-accepted-by-hm-land-registry-pg82
What is a share warrant?
A share warrant gives its holder the right, but not the obligation, to subscribe for newly issued shares in a company at a fixed price, on or before an expiry date. It is commonly used in venture debt, bridge rounds and as an investment sweetener. Because it commits the company to issue equity in the future, the terms need to be precise. This is general information, not legal or financial advice.
How is a warrant different from a share option?
The two are similar in giving a right to acquire shares at a set price, but they arise in different contexts and can have different legal and tax treatment, options are often used for employees and advisers under specific schemes, while warrants are more commonly issued to investors, lenders or partners. The distinctions matter, especially for tax, so take specialist advice. General information only.
What does anti-dilution do in a warrant?
Anti-dilution provisions protect the holder's economic position if the company later issues shares in ways that would otherwise reduce the value of the warrant, by adjusting the number of shares or the exercise price. The mechanics can be technical, which is a key reason warrants should be professionally reviewed. This is general information, not legal or financial advice.
Can I just fill in a warrant template myself?
You can produce a solid draft from a vetted template, but you should not treat it as final. Warrants engage share capital, dilution and tax, and the anti-dilution and corporate-event provisions in particular need care. Specialist review before use is strongly recommended. General information, not legal or financial advice.
Can a warrant be signed electronically?
Often, though you should check whether your warrant needs to be executed as a deed, which carries additional formalities. Where electronic signature is appropriate, the drafted warrant flows into e-signature in 99 Data Rooms with an audit certificate. E-signatures are admissible for most commercial documents in England and Wales, subject to the usual exceptions. General information, not legal or financial advice.