Document background
The Safe Equity Agreement is designed for early-stage startups in India seeking to raise capital without immediately setting a valuation or issuing equity. This instrument, adapted from the Y Combinator SAFE for the Indian legal context, provides a simplified alternative to convertible notes while ensuring compliance with Indian corporate and securities laws. The agreement is particularly useful for pre-seed and seed rounds where traditional equity pricing may be premature or impractical. It includes essential provisions for future conversion to equity, typically triggered by qualified financing rounds, and incorporates necessary safeguards for both investors and companies under Indian law. The document addresses key requirements under the Companies Act 2013, SEBI regulations, and where applicable, FEMA guidelines for foreign investment.
