Snap doesn't need olds to do well — here's why

Too much optimism in Snap?

It's well known that Snapchat's audience is mostly millennials, and that older people notoriously don't understand the app.

And that might not be bad for the company's prospects. Hans Tung, managing partner at GGV Capital, said Snap's best growth opportunity is with millennial users outside of the U.S.

"[Snap] is growing faster internationally than inside the U.S.," Tung said Monday in an interview on CNBC's "Squawk Alley." "There's a lot of commonality among millennials on a worldwide basis," and this is where Chief Executive Evan Spiegel's company should look to monetize its assets, he said.

"The attraction for users is that their parents are not on it — parents don't get it." So that means "more freedom for users to express themselves," Tung said.

On Monday, shares of Snap traded negative for the first time, and at midday were down nearly 7 percent, hovering above $25 per share. This came after the stock soared more than 40 percent Thursday after its IPO.

Tung is not an investor in Snap but has invested in social companies such as, Slack and Bustle.

"From what we have seen, Snapchat is making an effort to beef up its advertising team," Tung told CNBC on Monday. "Judging where Instagram and Facebook are now, Snap has a way to go to get to that level of sophistication."

Disclosure: CNBC parent NBCUniversal is an investor in Snap.