Start-ups and fledgling small businesses are facing a cash crisis in capital raising efforts. According to a report from the National Venture Capital Association and Thomson Reuters, last year saw a 10 per cent decrease in dollar commitments by VC firms, while the total number of deals dropped by 13 per cent.

Hardest hit in the recent drop in venture capital raising have been the mega deals. Recent research by data provider CB Insights have indicated that there were just 38 fundings of $100 million or more in the final quarter of 2015 – a sharp drop from the 72 that closed in Q3. And last week, law firm Fenwick & West concluded in its annual venture capital survey that, while not quite alarming, signs of a weakening VC market were imminent.

This funding chill comes in the wake of significant markdowns in valuation of so-called “unicorns” Snapchat and Dropbox, reflecting growing unease within the VC community about the ability of such big bets to deliver on their original promise. It also reflects a consolidation of VC dollars, as investors chase lucrative stakes in companies that have already gained a lot of traction – such as Uber, which has drawn $3 billion in funding since 2014 – while passing over more nascent market entrants.

For newly minted companies seeking a life-giving injection of cash from angel investors, this comes as potentially very bad news. Tax breaks for VCs that invest in high-tech startups can offer some relief (like the Angel Tax Credit Act), but as Adam Quinton CEO of VC firm Lucas Point Ventures pointed out in a recent LinkedIn post, startups are now facing bigger funding hurdles.

The hurdles in the capital raising market

There’s a huge oversupply in the market. The collapse in the cost of launching a tech startup has caused an explosion in the number of startups looking to raise capital, while angel investor funds and bandwidth have remained relatively static. Another big problem is “investor fatigue” — not enough angels who invested during previous rounds saw sufficient returns to be able to fund the latest round of startups.

With January also marking the first time since September 2011 that no IPOs were filed all month, the tech sector is facing a harsh reality check that has already seen companies like Yahoo and Twitter being forced to shed staff, and some unicorn startups like Square drop in value. While many of these larger companies may survive what investors are calling “the great reset”, smaller businesses and startups that are looking for the support they need to get their ideas off the ground face a tough fight.

The benefits of joint ventures

For businesses meeting only dead ends and closed doors in the angel investor scene, alternative sources of funding offer a potential lifeline. Government grants and contracts, such as those offered through the SBIR program, offer up one possibility. Another possible route is online crowdfunding through websites like Kickstarter and StartupValley; that’s how Oculus Rift and the Pebble Time Smartwatch got started.

The third alternative – ideal for startups that can’t afford to invest a lot of sweat equity or don’t want to spend countless hours pitching to skeptical investors – is to find the right strategic business partnerships.

Regardless of your funding status, it’s always worth starting the partnership conversation as early as possible as a way to accelerate your company’s growth. For an example, one need look no further than Uber; their partnership with Google Ventures, which leveraged the search giant’s maps and GPS technology, ultimately resulted in Google investing $258 million in the popular ride-sharing company.

As this shows, the most successful partnerships tend to be those that have a mutual benefit. Uber’s integration with Maps gave its customers real-time updates on ride availability, while keeping users off competitors’ map apps.

Innovating the search for partners

However, finding the right strategic partner can be a lot of work in its own right, especially when differentiation is so hard to achieve and the right professional networks can take months or years to build.

Startup accelerators such as SABLE address these concerns by providing mentorship to new businesses that’s aimed at bringing their products to commercial viability more quickly. SABLE also uses partner-matching technology in the form of Powerlinx’s matching engine to connect companies to opportunities in areas such as capital acquisition and financing, geographic expansion, customer acquisition and exit planning.

For businesses that hope to expand into new markets, or simply need enough money to get away from the starting block, the decline in angel investment shouldn’t be viewed as a disaster. In contrast, it’s an opportunity to pursue more agile and innovative paths to success.