Rights & consent
ROFR & Transfer Consent, Step by Step
The right-of-first-refusal clock that determines whether your buyer actually gets the shares.
A right of first refusal (ROFR) lets the company — or sometimes its existing major investors — match any external offer and buy the shares themselves instead of letting the sale go through to the outside buyer. It's the single most common reason a secondary deal that looked done on both sides doesn't actually close with the buyer who negotiated it.
The mechanics run on a clock: once you notify the company of a signed offer, it typically has a defined window (30 days is common, but check your specific documents) to exercise its right or let it lapse.
How it works
- Buyer and seller agree price and terms, usually in a signed term sheet or letter of intent.
- The seller (or the platform facilitating the deal) formally notifies the company of the proposed sale, triggering the ROFR window.
- During the window, the company can match the offer and buy the shares itself, decline in writing, or simply let the window expire without responding.
- Only once the window closes without the company exercising can the sale to the original buyer proceed to closing.
Worked example
A buyer signs a term sheet to purchase $50,000 of common stock. The seller notifies the company five days later, opening a 30-day ROFR window.
- Day 0
- Term sheet signed at $50,000
- Day 5
- Company formally notified
- Day 35
- ROFR window closes
- Outcome A — no exercise
- Deal proceeds to close with original buyer
- Outcome B — company exercises
- Company buys the shares itself at $50,000; original buyer gets nothing
Why it matters: A signed term sheet is not a closed deal — until the ROFR window actually lapses, a buyer has no guarantee the shares end up in their hands at all, even at an agreed price.
Watch out for
- Some companies extend informal "courtesy" notice to major existing investors even where their own documents don't technically require it — ask the seller whether anyone besides the company itself has a matching right.
- A company exercising its ROFR isn't necessarily a bad sign for the seller — it usually still means they get their price — but it is a dead end for the specific buyer who sourced the deal.
- Don't wire funds or treat a deal as final until you've confirmed in writing that the ROFR window has closed without exercise.