Article · 14 min read

Convertible Notes vs SAFE vs Equity: Which Instrument Fits Indian Seed Rounds

Dealplexus Free Intermediate India

This is the piece that makes the SAFE-vs-priced question concrete for an Indian founder, where a US SAFE has no legal standing and the iSAFE runs through CCPS anyway. It puts rupee numbers on the tradeoff (75k to 2.5L legal for a convertible note versus 5L to 15L for a priced round) and flags the compliance landmines, DPIIT registration, the 25 lakh minimum ticket, Form CN within 30 days, and angel tax.

  • A US-style SAFE is not recognised under the Companies Act or FEMA, so the Indian equivalent (iSAFE) is issued as CCPS, which is why a priced CCPS round is often already the default
  • Legal cost gap in rupees: 75k to 2.5L for a convertible note versus 5L to 15L for a priced round, closing in 2 to 4 weeks versus 6 to 12
  • Watch the India-only compliance: DPIIT recognition, 25 lakh minimum ticket, Form CN filing within 30 days for foreign money, and angel tax under 56(2)(viib) for resident investors
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The question it answers

  1. Should I raise on a SAFE or just do a priced round at seed?

Read with it

  1. This is the cleanest decision framework we found because it draws the line by cheque size, not vibes: under 1M and 1M to 2M go... CRV (Charles River Ventures) Article · 10 min read Priced Round vs. SAFE: How Founders Choose at Each Stage CRV
  2. This is the cost and dilution receipt to go with the CRV framework: SAFEs run 2k to 5k in legal and close in a week, priced... Causo Hub Article · 12 min read SAFE vs priced round at seed: which, when, and the dilution math Causo
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