Is Your Startup Worth Less than $10B? Don’t Go Public, Tim Draper says


Venture Capitalist and Silicon Valley veteran Tim Draper has a message for most startups: 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.




Reprinted by permission.

Image credit: CC by Andrew Turner

About the author: Fred Imbert

Fred Imbert is a CNBC News Associate covering markets.

Prior to CNBC, Imbert worked as a business consultant in San Juan, Puerto Rico and held an internship at the Central New York Business Journal where he covered small and local businesses.

Imbert graduated from Syracuse University with a Bachelor of Arts degree in Newspaper Journalism and Political Science.

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