iSAFE Notes
Structure and execute iSAFE (India Simple Agreement for Future Equity) notes for early-stage startup fundraising — Companies Act compliance, FEMA / RBI filings for foreign investors and equity conversion on the priced round.
Raise funds through iSAFE notes
Share your fundraising amount and investor details. We structure the iSAFE, handle FEMA filings and conversion.
Talk to a CS →A complete isafe notes package
iSAFE Agreement Drafting
iSAFE agreement with valuation cap, discount rate, conversion trigger and MFN clause — tailored for Indian law.
FEMA / RBI Filing
For foreign investors, iSAFE funds received as FDI advance — FC-TRS or advance reporting filed with RBI.
Compliance at Issuance
Board resolution acknowledging receipt of iSAFE funds — amounts maintained in a separate bank account.
Conversion at Priced Round
On conversion trigger (qualified financing), equity or CCPS allotted — PAS-3 filed within 30 days.
Valuation Cap Mechanics
Conversion price calculated based on valuation cap or discount — lower of the two applied at conversion.
Post-Conversion Filings
Shareholder register updated, FC-GPR filed (for foreign investors), new share certificates issued.
What is needed for isafe notes
iSAFE is Not Regulated Debt
An iSAFE is not a debenture or a loan — it is a contractual right to receive equity on a future financing event.
FEMA Advance Subscription Reporting
Foreign investor funds received under iSAFE must be reported to RBI as FDI advance within 30 days.
Conversion Requires Board Resolution
On conversion to equity, a board resolution must approve the allotment — PAS-3 filed within 30 days.
Valuation at Conversion
Conversion shares must be priced at or above fair market value — registered valuer report at conversion stage.
No Repayment Obligation
iSAFE funds cannot be repaid in cash — they must either convert to equity or lapse if conversion never occurs.
SEBI Restrictions for Listed Cos
iSAFEs are used only by private limited companies — listed companies must follow SEBI disclosure norms.
iSAFE funds received from foreign investors must be reported to RBI as FDI advance within 30 days of receipt. If the priced round (conversion trigger) does not occur within 5 years, the RBI may treat the advance as an ECB default. We set up the RBI advance reporting and track conversion deadlines.
Common issues with isafe notes
Simple steps, no surprises
iSAFE agreement executed
Valuation cap, discount rate, MFN clause and conversion trigger documented — agreement signed.
Funds received and reported
Investment received, RBI advance reporting done (foreign investors), board resolution passed.
Conversion at priced round
On qualified financing, conversion price calculated — equity or CCPS allotted to iSAFE holders.
Post-conversion filings
PAS-3 filed, FC-GPR filed (foreign investors), shareholder register updated, certificates issued.
Other services you may need
Frequently asked questions
An iSAFE (India Simple Agreement for Future Equity) is an early-stage investment instrument adapted for Indian law from the US SAFE note. The investor provides funds to the startup today in exchange for the right to receive equity (or CCPS) at a discounted price when the company raises its next priced funding round.
An iSAFE is a simple contractual agreement — not a share or debenture. It does not create an immediate security or debt obligation. Conversion happens at the next priced round. CCPS and CCDs are actual securities that must be allotted immediately on receipt of funds.
Funds received from a foreign investor under an iSAFE must be reported to RBI as an FDI advance within 30 days of receipt. On conversion, FC-GPR must be filed within 30 days of the equity allotment. Failing to report the advance is a FEMA violation.
If the priced round (qualified financing) does not occur within 5 years, RBI may treat the FDI advance as an impermissible liability. The funds may need to be returned — or the iSAFE must be converted into CCPS at a board-determined price to regularise the position.
iSAFE notes are used by private limited companies in their early stages. Listed companies cannot use iSAFEs as they must comply with SEBI disclosure and pricing norms. The instrument is best suited for angel and pre-seed rounds before a formal valuation is available.
Raising funds through iSAFE notes?
We draft the agreement, handle RBI advance reporting and manage the conversion to equity — FEMA compliant.