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Right of First Offer

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Home Startup Terms Glossary Right of First Offer

What is a Right of First Offer?

A right of first offer is defined as an agreement that requires the seller of a company to offer to sell the company to a rights holder before it is offered to the public. When this offer is made, a rights holder can decline to exercise their buying privilege. If this happens, the seller can only then offer the company for sale to the public.

Right of First Offer Examples

Key concepts of right of first offer:

  • Example 1. Rights holders are usually investors
  • Example 2. Favors the seller
  • Example 3. Generally included in the terms of a business partnership
  • Example 4. Once rights holder refuses, a new offer cannot be offered

Here’s another web page about right of first offer.

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