A right of first refusal (ROFR) is a contractual right granting the holder the opportunity to purchase shares — or other assets — on the same terms that a third party has offered, before the seller can complete the transfer. The seller must first present the third-party offer to the ROFR holder, who then has a defined window (commonly 15–30 days) to match the terms and acquire the shares directly.
ROFRs serve two distinct functions in venture and shareholders’ agreements: company-level ROFRs protect cap-table integrity by allowing the company (or designated existing shareholders) to repurchase shares before they are transferred to outside parties — preventing competitor entry, cap-table fragmentation, or unwanted secondary holders. Investor-level ROFRs allow venture investors to maintain or increase their position by matching third-party offers for founder or co-investor shares.
Compare with ROFO (right of first offer): under ROFO, the seller must first offer shares to the right-holder before approaching third parties at all — a procedurally earlier, more seller-burdensome mechanic. ROFRs activate only after a third-party offer exists; ROFOs activate before the seller can solicit external interest.
Structural considerations include: the trigger scope (all transfers, transfers above a threshold, transfers excluding affiliates/family), exercise mechanics (full match required or partial exercise permitted), price determination (third-party offer price, formula-based, or independent valuation), and process timeline (notice periods, election windows, closing deadlines).
Vircon Legal drafts and negotiates ROFR and ROFO provisions for founders, venture investors, and minority shareholders — calibrating scope, mechanics, and timing to align with shareholders’ agreement architecture and Turkish Commercial Code requirements on share transfer restrictions.
How a right of first refusal restricts share transfers
A right of first refusal (ROFR) lets the company or existing shareholders step in before shares are sold to an outsider: if a shareholder receives a bona fide offer, they must first offer the shares to the ROFR holders on the same terms, and only sell to the third party if those holders decline. Its purpose is control — keeping the cap table closed and stopping unwanted parties from buying in. It differs from a right of first offer, where the selling shareholder must approach existing holders first, before shopping the shares around. For the right to bite in practice, it should be written into the shareholders’ agreement and, ideally, reflected in the articles and the share transfer mechanics, so a transfer made in breach can actually be blocked rather than merely give rise to a damages claim.