The term ‘right of first refusal’, also known as a “preemptive right” refers to the ability of an investor to take the first “at bat” in the event of a potential liquidation event, sale of equity or other relevant trigger. For example the right of first refusal related to the sale of equity would give an investor the right to purchase (or pass) on the shares being offered by a shareholder, before anyone else gets the same opportunity. In the event of a liquidation event, it would give the investor the right to purchase (or pass) on the outright sale of the company and its assets. Typically the right of first refusal is included in the provisions of the term sheet that is provided to the business receiving the investment.