Elon Musk could have saved himself some trouble by taking Tesla private, according to early investor and prominent Silicon Valley venture capitalist Tim Draper.

In an interview with CNBC at the Web Summit conference in Lisbon on Tuesday, Draper said Elon Musk made a "human" mistake when he tweeted he had secured funding to take Tesla private in August. The Securities and Exchange Commission (SEC) charged Musk with misleading investors, ultimately costing the company $20 million in settlement fees and Musk his title as Tesla chairman.

"Every human in the world has made a mistake and there are so many laws that you have to follow if you're a public company," Draper said. "He probably should have just taken the whole thing private."

Draper said investors need to be more sympathetic toward Musk, who is leading two "amazing" multi-billion dollar firms, Tesla and SpaceX. Draper, who founded VC firms Draper Associates and DFJ, was an early investor in both of Musk's companies.

"We have to sort of say, hey look, he's a human being, he's doing the best he can," Draper said.

Musk released a blog post at the end of August saying Tesla would remain a publicly traded company, citing resistance from shareholders. Tesla shares have been in upheaval since August, dropping to a 52-week low in early October then rebounding following a stellar third-quarter earnings report. Some analysts have cited Musk's erratic behavior as a concern for the stock.

"This guy's awesome," Draper countered. "Let's do what we can to support him."

Draper has previously defended other embattled tech CEOs like Facebook's Mark Zuckerberg and Theranos' Elizabeth Holmes. He said products like Tesla are unparalleled in the market and "we are so lucky" to have the creations of entrepreneurs like Musk.

"These guys have really transformed the world and we should just thank them everywhere we go," he said.