A right of first offer (ROFO) obliges a selling shareholder to first offer their shares — at a price they set — to the company or other shareholders before selling to a third party. If the holders decline, the seller may proceed to outsiders on terms no better than those offered.
ROFO differs from a right of first refusal (ROFR): under ROFO the insider sets the opening price first, whereas under ROFR the insider matches a price already negotiated with a third-party buyer. ROFO is generally seen as more seller-friendly and less likely to chill outside bids.