A warrant is a right, but not an obligation, to buy or sell equity (normally stock) in a company. In that sense, it is similar to a stock option. Similar to stock options, warrants also are subject to expiration, and they can be either call warrants or put warrants. Similar to call options or put options, a call warrants give the holder the right to buy, while put warrants give the holder the right to sell. Unlike stock options (other than employee stock options), warrants have a dilutive effect on the equity of a company. This means that when the holder of a warrant exercises the warrant – assuming it is a call warrant – then the holder receives newly issued equity altogether, as opposed to already outstanding equity in the company. Further, the expiration period for warrants tends to be longer than it does for stock options. The expiration periods can run into the years, while stock options tend to be shorter than that. Warrants are not very common in the United States as a means of investing in startups and other fast growth companies. Instead, a common form of initial investment is typically a convertible note, followed by preferred stock, which is issued in multiple rounds, each referred to as a series.