Right of First Offer (ROFO)

The Right of First Offer (ROFO) is a contractual obligation by the owner of an asset to negotiate the sale of the asset with the rights holder before offering sale of the asset to any third parties. In the context of startups, this usually gives an investor the right to purchase his or her pro-rata ownership of any new securities issued by a startup. This is a way to prevent ownership dilution.

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