Venture Capitalist and Silicon Valley veteran Tim Draper has a message for most start-ups: Don't go public yet.
"I think going public now is not the greatest thing in the world for an entrepreneur, unless the company is worth about $10 billion. Wasting $5 million a year to comply with regulations doesn't make any sense. As a result, companies between $100 million valuations and $10 billion valuations are looking for liquidity," Draper, founding partner at DFJ, told CNBC's "Fast Money: Halftime" on Monday.
Valuations have been declining recently, leading to less private firms going public. The Renaissance IPO ETF is down more than 7 percent this year, despite a sharp bounce off its February lows.
"For now, I'm not encouraging any of my entrepreneurs to think IPO. It doesn't make any sense; they should be thinking in terms of building a great company that's profitable and can grow and that, down the road, these companies should be tradable," he said.