Right of First Refusal Tail Financing Clause Samples

The Right of First Refusal (ROFR) and Tail Financing clause grants a party, typically an investor, the opportunity to accept or decline an offer to participate in future financings before the company can offer those terms to outside parties. In practice, this means that if the company seeks additional funding, it must first present the terms to the existing investor, who can choose to match the offer or let the company proceed with new investors. The 'tail' aspect ensures this right continues for a specified period even after the investor's initial involvement ends. This clause primarily protects investors by giving them priority access to future investment opportunities and helps maintain their ownership percentage, while also providing the company with a clear process for securing additional capital.