Startup investors that held off on exiting investments after their initial public offerings are left to rue the decision.
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Venture-capital firms that deployed a new strategy of holding stocks for longer have come to regret it amid last year’s market rout.
During the recent bull market, venture-capital investors that typically exit a stock after taking it public held on to their shares in the hope of maximizing returns. Instead, the sharp selloff in technology stocks in 2022 has dealt a punishing blow to that strategy. Some of the splashiest startup stocks from 2021 plunged, making it unlikely those investors will recover the value of their earlier positions anytime soon, if at all.
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