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MTS · 2 min · Oct 28, 2026

Compute access may require startups to raise far more capital

Evan Conrad says Series A startups should raise far more or find an investment-grade partner to co-sign compute leases. He puts the potential fundraising bar near $1 billion, a threshold that could concentrate access among the biggest firms.

Evan Conrad

Evan Conrad is co-founder and CEO of SF Compute.

Founded SF Compute, a GPU cluster exchange where buyers can resell unused compute time on contracts they can exit.

  • Theo Jaffee, Host · Co-founder & host, MTS

    One of the first members of a16z's new media team; earlier hosted the Emergent Ventures-backed Theo Jaffee Podcast.

  • Sophia Dew, Host · Host, MTS

About this segment

Evan Conrad says Series A startups should raise far more or find an investment-grade partner to co-sign compute leases. He puts the potential fundraising bar near $1 billion, a threshold that could concentrate access among the biggest firms.

From “AI Startups Locked Out of Compute in 6 Months | Evan Conrad”, Oct 28, 2026. Watch the full episode

“I think you should try and raise like a billion dollars.”
Evan Conradat 11:44 · MTS11:44

Takeaways

  1. Use a creditworthy partner's balance sheet to co-sign a lease.
  2. Conrad suggests raising 10x the planned round.
  3. He puts the potential fundraising bar near $1 billion.

In this episode

Full episode
  1. 0:49Compute prepayments are pricing startups out of clustersPro pick 5:07
  2. 6:39GPU clouds face correlated customer and financing risk3:16
  3. 16:04SF Compute aims to make GPU rights usable as collateralPro pick 3:50

  4. 10:20Compute access may require startups to raise far more capital2:16

  5. 13:19A small GPU cluster may be hard to resell after its tenant fails2:57Up next

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

  1. 10:27

    on to the episode. Like you said, you know, you don't believe this, but it doesn't matter what you think. It matters what lenders think. So, like, do you think that a scenario like this is possible because, like, lenders will just freak out? So, right now, lenders are freaking out um i hope that the anthropic um s1 like calms a lot of people down because i think a lot of people were basing up things off of just like incorrect information um and so hopefully that changes things um but at least where we stand right now it is hard to get debt which then ripples through the whole economy and it's not good for startups so if you're a startup raising a series a right now like what would you do i would raise as much money as i can um i would raise um i would take your round and i would add 10x to it um and if i was an investor i would buy

  2. 11:20

    compute instead um i would yeah basically i would either try to find a big investment grade normal company that i can either partner with or sell to um in some cases um and use their balance sheet to co-sign on the lease with me so I get investment grade credit or I would try to raise the biggest round I possibly can and so I'm above the bar. What do you think the bar is now? Like a billion dollars.

  3. 11:51

    Like if you're trying to raise a round I think you should try and raise like a billion dollars. It depends on your industry obviously. That sounds like, you know, kind of like... Oh, you know, why didn't I think about raising a billion dollar round? I know. That's the problem. This is what I'm saying. This is why the article is called End of Startups, is because I don't think many people can raise a billion dollar round.

  4. 12:11

    I think that's extremely difficult to do. And the ones that you see are the ones that are like playing with red dots. It's just survivorship bias. I think that in general, if you don't fix the debt problem, most of the portfolios of various venture firms are going to consolidate or get wiped out