I was reading an article in a VC's blog and I found this explanation about venture debt:
"The terms are usually three years, interest only, balloon payment, with warrants for the equity kicker."
Can you explain the 'warrants for the equity kicker' part?
Warrants are the right to buy stock at a fixed price until it expires.
An equity kicker is a special bonus part of a loan that gives someone who loans money to a company (as debt) an extra bonus right to purchase shares in the company.
So the sentence, in plain English, would be: