Right of first refusal (ROFR)

A contractual right to match an offer before the asset or shares are sold to a third party.

Example

A corporate investor matching a competitor's offer to acquire the startup.

Important

Even if never used, it can deter other bidders who expect their offer to be matched.

Related terms

  • Strategic investor — An investor, usually a company, whose motives for investing include business benefits such as technology access, distribution or future acquisition, not only financial return.

Lessons that explain it

  • A corporate investor may want the company more than the return — Corporate venture arms and strategic investors put money into companies for strategic reasons as well as financial ones, which can bring distribution and credibility - and conflicts. (9 min)

All 578 terms in the Investing glossary