The National Venture Capital Association (NVCA) empowers the next generation of American companies that will fuel the economy of tomorrow. Smith, as freeholder, is not the immediate landlord of the flats and would be free to dispose of the freehold (even to Brown) without offering it to the flat-owners first. Or, less common, an investor may look to include a right where they can take the entire round at such new financing (also known as a “right of first refusal”).

Below is a typical term sheet provision. Right of First Refusal (ROFR) A shareholder can’t be able to sell his or her shares without offering these shares to existing shareholders on the basis that the new investor shouldn’t enter the capital structure without group consent; ROFR is a transfer restriction A common mechanism used to address this concern is a right of first refusal (ROFR). Sorry to be so blunt, but if the investor is telling you that it's standard for a seed investor to get rights to take 100% of the equity in a future round they either don't know what they're doing, or they're trying to screw you. The right of first refusal and co-sale (“ROFR/Co-sale”) work together to prevent a founder or major common shareholder for selling shares without the company and the investors being allowed to purchase the shares or participate in the sale of the shares.

Right of first refusal and co-sale agreement. For example, the business may hold the first right to purchase any shares sold by any shareholder, who can only sell the shares to an outside party if the business first refuses to purchase them. A ROFR provides non-selling shareholders with the right to accept or refuse an offer by a selling shareholder after the selling shareholder has solicited an offer for their shares from a third-party buyer. Or, less common, an investor may look to include a right where they can take the entire round at such new financing (also known as a “right of first refusal”). Exhibit 10.52 . A right of first refusal is designed to control which parties may own a significant number of shares in the company and give the venture capital investors the first opportunity to purchase shares if they desire to do so. They say a party to a joint venture agreement or a ground lease can’t sell their position unless they first give the other party an opportunity to buy it—the right of first refusal or right of first … RIGHT OF FIRST REFUSAL AND RIGHT OF LAST REFUSAL AGREEMENT . You need to be more careful if you raise convertible debt from a venture capital firm. (Note that if your startup goes through a seed or venture capital round, it may have a Right of First Refusal document which allows investors similar rights to the company to step in place of a prospective 3rd party purchaser and purchase the securities being transferred by a …

If both parties in a divorce settlement understand the agreement and potential results therein, a “Right of First Refusal” within a decree can be a positive.

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