Founder answers
SAFE vs CCPS in India: which should you raise on?
Short answer
In India most priced rounds use CCPS (Compulsorily Convertible Preference Shares — equity priced today), while the earliest cheques often use an iSAFE (an India-adapted SAFE that converts later at a cap or discount). A US-style SAFE doesn’t map cleanly because FEMA and the Companies Act shape which instruments are allowed.
Why the instrument is a regulatory choice
Unlike the US, where a SAFE is a simple default, Indian fundraising instruments are constrained by FEMA (for foreign investors) and the Companies Act. That’s why founders use iSAFEs, CCPS, or CCDs rather than a plain US SAFE.
CCPS — the priced-round workhorse
CCPS are preference shares that must convert to equity later. They’re priced today and carry the preference terms (liquidation preference, anti-dilution) you negotiate on the term sheet. Most Indian seed and Series A rounds are done on CCPS.
iSAFE / convertibles — the early cheque
An iSAFE converts at your next priced round at the better of a valuation cap or a discount. It defers pricing, which is useful for the first small cheques before you can price a round.
Common questions
Does a SAFE convert at the cap or the discount?
At whichever gives the holder more shares — the lower of the cap price and the discounted round price.
Is CCPS equity or debt?
CCPS is equity (preference shares) that compulsorily converts to common equity; it is not debt.
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