Is YC's standard SAFE legal in India?

Not directly. Standard YC SAFEs don't fit Indian Companies Act categories (equity or debt). Indian founders should use iSAFE for the SAFE-equivalent structure or restructure post-close to a compliant instrument before the next round.

What valuation cap is standard for Indian iSAFEs in 2026?

Typical Indian iSAFE caps: ₹12–25Cr at pre-seed, ₹20–40Cr at seed. Discount rates are typically 10–20% with 20% being most common.

Can I use both iSAFE and CCD in the same round?

Yes, this is common when raising from both angels (iSAFE) and institutional investors (CCD). Make sure both instruments convert at the same priced-round trigger with the same cap to avoid post-conversion disputes.

What happens if my CCD matures before the next round?

The CCD converts automatically at the maturity-date valuation specified in the agreement, typically a 15-30% discount to the issue valuation. Better to renegotiate before maturity if the next round is delayed.

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Tool Comparison

SAFE vs CCD in India: Which Convertible Instrument to Use

Standard YC SAFE agreements aren't enforceable under Indian company law — they don't qualify as either equity or debt. Indian startups use one of two compliant alternatives: iSAFE (a CCPS-based variant) or CCD (Compulsorily Convertible Debenture).

Choosing wrong adds 4–6 weeks to your next priced round close and can create FEMA compliance issues at conversion. The decision is mostly about round size and how soon the next priced round is expected.

Feature

iSAFE / CCPS

CCD

Underlying instrument

CCPS (preference share)

Debenture (debt-classed)

Legal cost to issue

₹50K–₹1.5L

₹1.5L–₹4L

Time to execute

4–5 days

2–3 weeks

Interest rate

None

0.01%–1% (token, satisfies debt rules)

Maturity

Triggers at next round, indefinite

Hard maturity 18–24 months

Best for round size

₹25L–₹2 Cr

₹1 Cr+ or longer to next round

Investor familiarity

Growing (100X.VC pioneered)

Standard for institutional rounds

Conversion mechanics

Valuation cap + discount

Same: cap + discount

FEMA compliance

Standard equity reporting

Standard debt reporting

iSAFE was pioneered by 100X.VC in 2019 specifically to give Indian startups a SAFE-equivalent instrument that's enforceable under Indian law. It's structured as a Compulsorily Convertible Preference Share (CCPS) with SAFE-like commercial terms — no interest, no maturity, converts at the next priced round with valuation cap and/or discount. The execution is fast (4–5 days), legal costs are low, and Indian angels have grown familiar with the structure.

CCDs are the older, more conservative path. As Compulsorily Convertible Debentures, they're classified as debt under the Companies Act and require nominal interest (typically 0.01–1%) to maintain debt classification. The trade-off is that CCDs have a hard maturity date — if the next priced round doesn't happen within 18–24 months, the CCD either converts at a default valuation or rolls over with renegotiated terms. This makes CCDs the safer choice for founders who expect a longer gap to the next priced round.

The most common founder mistake: signing an offshore SAFE while incorporated in India. This creates RBI/FEMA compliance friction at conversion and adds 4–6 weeks to the next priced round close. Restructure to iSAFE before the next round if you're in this situation.

For most Indian sub-₹2Cr rounds in 2026, iSAFE is the right default. For larger rounds, longer expected gaps to the next round, or institutional investors with established CCD preferences, CCD remains standard.

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