Fundraising & Investors

How do SAFEs and term sheets differ in India versus the US?

A starting point

India can't use the plain US SAFE directly because of company-law constraints, so founders use the iSAFE (structured as compulsorily convertible preference shares) and CCPS-heavy term sheets. Preferences, anti-dilution, and conversion mechanics look different on paper. Get an Indian startup lawyer to walk you through the CCPS structure before signing, not after.

Go deeper

Hand-picked from around the web, each with a note on why it's here.

Read

📄 Article
India Free Advanced

Decoding Term Sheets for Early-Stage Startups

From Inc42 by Siddarth Pai, Roma Priya, Yagnesh Sanghrajka 30 min read (guide)

Why we picked it

A practical India-specific guide to term sheets and iSAFEs, written by working Indian VCs and startup lawyers (3one4 Capital, Burgeon Law, 100X.VC). It maps global concepts onto Indian legal structures like CCPS.

  • Covers valuation, investor rights, restrictive covenants, and exit terms in the Indian context
  • Explains the iSAFE / CCPS structure and how it differs from a plain US SAFE
  • Helps founders prepare for common Indian term-sheet negotiation points
Open inc42.com →
📖 Book
Paid Advanced

Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist

From Wiley by Brad Feld & Jason Mendelson book (~300 pages)

Why we picked it

The definitive book on how VC deals really work, written by two Foundry Group VCs. It demystifies the term sheet term-by-term so you negotiate from knowledge, not fear.

  • Term sheets divide into economics and control; the dangerous clauses often live in control, not the headline valuation
  • Understand liquidation preferences, option pools, and protective provisions before you sign anything
  • Know the VC's incentives and fund structure so you can predict how they'll behave
Open venturedeals.com →

Use

🛠️ Tool
Free Intermediate

YC Safe Financing Documents (Official Post-Money SAFE)

From Y Combinator by Y Combinator templates + primer

Why we picked it

The primary source for the SAFE itself, plus YC's plain-English primer explaining post-money mechanics. Use the official document, not a random copy, and read the primer before you sign.

  • Post-money SAFE lets you calculate investor ownership precisely and immediately
  • Five standard variants (cap, discount, MFN, etc.) plus an optional pro-rata side letter
  • It's a starting point usable in most situations without modification
Open ycombinator.com →

People also ask

What is a SAFE and how does it actually work? A SAFE (Simple Agreement for Future Equity) lets an investor give you money now in exchange for equity later, when you raise a priced round, withou... Beginner 3 resources → What's the difference between a valuation cap and a discount on a SAFE? A cap sets the maximum valuation at which your SAFE converts, protecting the investor's upside if you raise your next round at a high price; a disc... Intermediate 3 resources → How is my startup's valuation actually decided at the early stage? At seed there's no spreadsheet truth; valuation is set by market comps, your traction, the strength of the team, and mostly by supply and demand fo... Intermediate 3 resources → What do the key terms in a term sheet actually mean? Term sheets split into economics (valuation, option pool, liquidation preference) and control (board seats, protective provisions, voting). The sca... Advanced 3 resources → How much dilution should I expect across seed and Series A? Plan for roughly 10-20% dilution per priced round plus the option pool, and remember that stacked SAFEs at different caps all convert at once and c... Intermediate 3 resources → What kind of businesses are actually a good fit for venture capital? VC math only works for companies that can plausibly return the whole fund on one bet, which means a huge market, a business that gets more valuable... Intermediate 3 resources →