Research on Investors' Right of First Refusal in Private Equity Investment

Abstract

The right of first refusal clause for investors in private equity investment is one of the fastest terms to reach agreement between investors and the founding team in investment agreements. However, due to the complexity of transactions in practice and the imperfect relevant regulations, various conflicts and disputes such as shareholder transfer of equity and other shareholders claiming the right of first refusal often occur in practice, which not only affects the internal stability of the company but also affects the interests of third parties. Therefore, this article provides a deep analysis of the right of first refusal through its background and practical value, sorts out and analyzes the key points that may be involved in the exercise of this clause, and puts forward relevant suggestions for the improvement of the right of first refusal. This has important practical significance for both investors to better protect their own rights and interests in practice.