ROFR (in Secondary Context)
The company's contractual right to buy your shares at the offered price before any outside sale.
Definition
In the secondary market context, ROFR (Right of First Refusal) is the company's right to purchase shares that a shareholder wants to sell, on the same terms offered by the outside buyer. The process typically works as follows: you find a buyer and agree on terms, you notify the company, the company has 15-30 days to decide whether to buy the shares themselves, and only if they decline can you proceed with the outside sale.
Why it matters
Companies often exercise their ROFR on secondary sales to keep their cap table clean or to buy shares at a discount to the latest round price. If the company exercises, you still get your money, but the buyer is the company, not the outside investor.
Example
You agree to sell 5,000 shares at $30/share to a secondary buyer. You submit the ROFR notice to your company. After 20 days, the company decides to exercise its ROFR and buys the shares itself at $30/share. You receive the same $150,000 either way.