NATURE OF iSAFE & SAFE
iSAFE (or India SAFE) was introduced by an Indian VC firm
100X.VC, as an adaptation of 'SAFE' (or 'Simple
Agreement for Future Equity') document originally introduced by
US based fund Y-Combinator. Speaking in Indian legal terms, we see
the Y Combinator 'SAFE' as a non-expiratory, non-interest
bearing 'Memorandum of Understanding for contingent stock
issuance' with advance consideration, and contingent re-payment
obligations in form of cash or conversion to stocks.
iSAFE IS AN AGREEMENT FOR ISSUANCE OF CCPS
The iSAFE, as we see it, is nowhere similar to SAFE either in
form or context. It is rather simply an "agreement for
issuance" of CCPS (Compulsory Convertible Preference Shares),
which are interest rate bearing, having contingent 'class
conversion' obligations on the issuing company, and a
definitive date for equity conversion. The 'class
conversion' provisions are however somewhat similar or
identical to the future equity issuance
