Weekly Update #188: It ain't over til it ain't ROFR-ed
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It ain't over til it ain't ROFR-ed: Why companies sometimes exercise their Right of First Refusal (ROFR)
If you've been an active investor on EquityZen's platform, you've probably heard us reference the Right of First Refusal, or ROFR (pronounced "row-fur"), before. As a refresher, it's a clause that gives a company (or some of its investors), the right to match the purchase price of a secondary transaction and buy the shares themselves.
I hate to brag, but we do have a pretty awesome FAQ: https://equityzen.com/faq/
Here's a procedural example of a company exercising their ROFR:
So why might a company (or its investors) exercise their ROFR? Here are a few:
"Well Phil, that kind of stinks. What can we do to avoid the ROFR?"
There is some good news here. For one, the ROFR is not a common occurrence for EquityZen's transactions: less than 15% of EquityZen's transactions have been ROFR'd (roughly 1 in 7). Additionally, transactions that involve Preferred Stock are rarely subject to a ROFR.
In other news...
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