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The Simple Agreement for Future Equity (SAFE) has become increasingly popular in the Indian startup ecosystem as a streamlined alternative to convertible notes. This document is typically used for early-stage funding where traditional equity rounds might be premature or impractical. It enables companies to raise capital quickly while deferring complex valuation discussions until a future equity round. The agreement must comply with Indian corporate law, particularly the Companies Act 2013, SEBI regulations, and where applicable, FEMA for foreign investments. SAFEs are particularly valuable for startups seeking seed funding or bridge financing between equity rounds, offering investors the potential for equity ownership while providing companies with immediate capital without the complexity of a priced round.
