What does “warrants for the equity kicker” mean?

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:

• The terms of a venture debt loan are as follows:

  • The loan is for three years.
  • It is an interest only loan, which means that each month, only the interest on the loan is due... you do not pay back any part of the principle.
  • It has a balloon payment, which means that at the end of the three years, the entire principle must be paid back all at once.

  • To make the loan a better deal for the lender, the lender will have the right to purchase some shares of stock in the company at a fixed, pre-agreed upon price.

    • This part is done by issuing warrants, the right to buy a certain amount of stock in the company at a certain price within a certain price range.