A right of first refusal (ROFR) is a contractual right to match any third-party offer to buy shares before they can be sold. Held by the company, existing investors, or other shareholders, the right-holder is typically given a defined window (often 15 to 30 days) to either accept or decline matching the offer at the same price and terms, after which the seller can complete the sale if no one matches. It is one of the most-common provisions in venture-backed company stockholders' agreements and one of the structural reasons private-company secondary markets have specific dynamics.
The typical structure: when a shareholder receives a bona-fide third-party offer to purchase their shares, they must notify the right-holder...