Subscription warrant (BSA)

A subscription warrant (BSA — Bon de Souscription d'Actions) is a financial instrument giving its holder the right — but not the obligation — to subscribe to new shares in a company at a predefined strike price during a defined period. BSAs are widely used in French startup ecosystems as advisors' compensation, bridge financing instruments or equity kickers attached to debt. They differ from BSPCEs (reserved for employees/directors of qualifying companies) and ordinary share purchase warrants in their conditions of issuance and tax treatment. Their valuation uses Black-Scholes or binomial option models.

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Example: a French startup issues 20,000 BSAs to a strategic advisor at a strike price of CHF 15/share (current value CHF 20), exercisable over 3 years. Black-Scholes valuation (35% volatility, 3-year maturity, 1.0% risk-free rate): CHF 8.50 per BSA — total value CHF 170,000, recognised as a service cost in the income statement. If the company exits at CHF 60/share, the advisor exercises the BSAs and realises CHF 45 × 20,000 = CHF 900,000 gross gain — an effective advisory compensation tied to company value creation.

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Hectelion values BSAs for IFRS reporting, due diligence dilution analysis and cap table modelling in French startup and growth company contexts.