Glossary · Investor rights
Right of first refusal
If a shareholder wants to sell shares to an outsider, ROFR lets the company or existing investors buy those shares first on the same terms — before the outsider can.
Related: Secondary sale · Preferred stock · Tag-along rights
A bit more nuance▾
- Keeps strangers off the cap table and can slow secondary liquidity.
- Different from tag-along, which is about joining someone else’s sale.
Go deeper▾
Discussion questions▾
- Who benefits most from tight ROFR — founders, investors, or the company?
- How would early employees experience ROFR if they need liquidity?
Educational reference only — not legal, tax, or investment advice. Terms vary by country and deal; ask a qualified professional when it matters.