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24 Pages Posted: 14 May 2003  

Victor Fleischer

University of San Diego School of Law

Date Written: May 12, 2003


This case study, intended as a teaching exercise, highlights the problems of contracting in a world of great uncertainty. Streetwatch is a startup company seeking financing, and the CEO has received two offers for investment, each with its own advantages and disadvantages. The case highlights the problem of asymmetric information as well as some possible responses, including monitoring, the structure of executive compensation, and staged financing and the "option to abandon."

The case also includes a negotiation and drafting "skills" exercise.

Suggested Citation

Fleischer, Victor, Streetwatch (May 12, 2003). Columbia Law and Economics Working Paper 227. Available at SSRN: or

Victor Fleischer (Contact Author)

University of San Diego School of Law ( email )

5998 Alcala Park
San Diego, CA 92110-2492
United States

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