The amount you raise is a strategic decision, not a trophy. Raise too little and you run out of cash before proving the milestone that unlocks the next round. Raise too much and you dilute yourself heavily and set a valuation you may struggle to grow into. This lesson gives you a disciplined way to size the round, protect your ownership, and choose the right instrument under current Indian law.
Size the round to milestones, not to a mood
Start from the milestone that will make your next round easy to raise. Ask what proof a Series A investor will want to see, then build a monthly cash plan that reaches that proof with 18 to 24 months of runway. Eighteen months is the floor because fundraising itself takes three to six months, and you never want to be raising with two months of cash left. Twenty-four months is a sensible ceiling early on, because buying longer runway forces a higher valuation that later rounds must then beat.
The method is simple. Name the milestone, cost the team and monthly burn needed to reach it, add a buffer of roughly 20 percent for slippage, then extend to your target runway. That total is your round. Let the number fall out of the plan, not the other way around.
Dilution discipline
Ownership is finite, and dilution compounds across rounds. Selling roughly 15 to 20 percent per round is a common target that keeps founders meaningfully in control over several raises. Three levers decide your dilution: the amount raised, the pre-money valuation, and the ESOP pool. Investors often ask for a 10 to 15 percent option pool created before their money goes in, which dilutes the founders and not the incoming investor. Negotiate the pool against a real 18-month hiring plan, not a round number. Protecting an extra few points at seed can be worth a great deal at exit.
Priced equity, iSAFE, or convertible note
In India a priced round is usually executed through Compulsorily Convertible Preference Shares (CCPS) issued under the Companies Act, 2013. You agree a valuation and price per share now, along with liquidation preference, anti-dilution, board seat, and reserved matters. Choose priced equity when you have the leverage to set a fair valuation and a lead investor to anchor the terms.
When you want to move fast and defer valuation, the iSAFE, introduced by 100X.VC, is the Indian adaptation of the US SAFE. Because a bare SAFE is not recognised under Indian company law, the iSAFE is structured as CCPS that convert at the next priced round, typically at a discount or a valuation cap, whichever is more favourable to the investor. For a purely domestic round it needs no valuation certificate at issue, which saves time and cost, though a non-resident subscribing to the same CCPS must still meet FEMA pricing rules.
Convertible notes are a distinct route. Only a DPIIT-recognised startup can issue them, the minimum is Rs 25 lakh per investor in a single tranche, and each note must convert to equity or be repaid within ten years. When the investor is a non-resident, Form CN must be filed with the RBI within 30 days of issue.
Compliance that shapes the term sheet
Two current facts matter for your terms. First, angel tax under Section 56(2)(viib) of the Income Tax Act has been abolished for all classes of investors with effect from 1 April 2025, so raising at a premium no longer triggers that tax. Second, foreign money brings FEMA duties: the shares must be priced at or above a valuation certified by a SEBI-registered Category I merchant banker or a chartered accountant, and Form FC-GPR must be filed with the RBI within 30 days of allotment. Build these steps into your closing timeline so they never delay the money.
Decide the milestone first, size the runway to it, guard your cap table, and pick the instrument that matches your leverage and your need for speed. Terms are never just price. They are the rules you will live under until the next round.