In the event of a primary offering (new stock issuance), the investor is safeguarded by the right of first refusal (ROFR), which grant the right to purchase additional stock in the company directly. In most cases, the ROFR also stipulates that the company has the right to purchase the investor’s shares before they are offered to any third party.

The right to participate in a secondary transaction, such as the sale of shares by another shareholder, is known as “co-sale rights.” The holder of the rights has the option to participate in the sale of the company’s stock at the same price and on the same terms as any other major shareholder. This is done to safeguard the interests of minor shareholders, who typically lack the financial clout to bargain for a favorable deal on their own.