A right of first refusal sits in every venture-stage shareholder agreement. Founders rarely negotiate it hard at signing because the document feels mechanical and the leverage is elsewhere. Five drafting points are worth looking at again before the term sheet is closed.
One — Trigger scope
A ROFR triggered by “any transfer” is not the same as one triggered by “any sale to a third party.” The first sweeps in transfers to family trusts, holding companies, and estate vehicles; the second does not. Founders who later restructure for succession or tax frequently find their own documents in the way of their planning.
Two — Match-or-decline mechanics
Some ROFR clauses require the rightholder to match the third party’s offer exactly. Others permit the rightholder to purchase at a price determined by an independent valuer. The two look similar; in a contested exit they are not.
Three — Drag interaction
A drag-along that triggers above a threshold can override a ROFR held by minority shareholders. Or it can be expressly subordinated to the ROFR. The default depends on the order of operations the drafter chose. Read both clauses together.
Four — Time windows
Thirty days to exercise a ROFR is industry standard; sixty is generous; fifteen is hostile. The window controls whether a real third-party buyer remains at the table during the exercise period. For a founder who would prefer the third-party sale to close, a shorter window is friendlier.
Five — Tag-along reciprocity
A ROFR for the company without a corresponding tag-along for minority holders is one-sided. A tag-along without a ROFR is incomplete. The two clauses move together and should be drafted together.
What we tell clients
Read the ROFR, the drag, and the tag-along as one document. Run the worst-case exit through them on paper, before signing. Whatever the model is, the model determines who decides when the company is sold.