It's getting more difficult for startups to raise venture capital these days. But taking venture capital is not the only place to look for funding to keep your startup going. You can also approach large companies in your industry for help.

If you can't raise more money from venture capitalists, consider partnering with a large company in your industry. Large companies have more capital and resources than a startup, but they need highly-motivated world-class talent that many startups possess.

Here are two ways to partner with a large company:

  • Raise capital -- in the form of equity or debt -- or
  • Get "acquihired" -- meaning the large company hires, retains, and motivates your talented team en masse to develop new products that boost its growth. This is better than simply laying off all your employees and letting large companies hire them one at a time.

Such large company partnerships are more important now because seed stage venture capital is drying up. As of last week, such capital had declined by about 22 percent globally since January 2020, according to the Wall Street Journal.

This drop in seed-capital is highlighting winners and losers. Retail and travel and hospitality are in the most difficult spot.

But big companies in other industries may be eager to partner with you. These industries include telehealth, autonomous delivery, disease diagnosis, virtual learning, data analytics, artificial intelligence and robotic process automation, noted the Journal.

If your startup is targeting these industries and is struggling to raise venture capital, getting acquihired may be a great option to consider. Here are five steps you should take to decide and act on getting your company acquhired.

1. Research Large Companies in Your Industry

Make a list of large companies that make and sell products that your company offers or is researching. Of those companies, pinpoint the ones that have publicly-stated an interest in your company's specific focus area.

Learn more about what these companies are doing to offer a competing product. Have they been hiring people that you wanted to bring to your company? Are they in negotiations to partner with your rivals? Have they been bidding for your company's customers?

If you find large companies for which the answer to these questions is yes, you should put them on your short list of candidates for acquihiring.

2. Assess the Cultural Fit

Since the aim of acquihiring is for a large company to bring in new talent that can help the company grow faster, cultural fit is essential. To make sure that exists, investigate the candidate company by interviewing former employees, investors, bankers, and others who know the company.

Explore questions such as: What are the company's stated values and how do they compare to what your company values? Do the company's executives act according to those values? How does the company treat its most talented employees? Does the company retain and promote its most talented employees? Does the company have high turnover?

Reject misfits and keep searching until you find a large company whose culture matches yours.

3. Explore the Mutual Benefits of the Acquihire

To initiate a conversation with a large company that fits your strategy and culture, get a mutual acquaintance to make an introduction to the large company's CEO. In your meetings, ask questions to assess whether both of your companies will be better off through a possible acquihire. 

Specifically, you should discuss your goals, target customer groups, people and technology resources, and how your people would work within the large company's organization.

4. Negotiate to Treat Your Top Talent Right

If you agree on these topics, jointly choose the individuals and teams that the large company will seek to hire, retain, and motivate following the acquisition. Work out the details of pay, bonuses, reporting relationships, performance evaluation, promotion opportunities, bonus arrangements, level of autonomy and other factors that will matter to your top talent.

5. Stick Around to Make Sure Promises are Fulfilled

Once your company has been acquihired you should stick around for as long as is needed to make sure that the large company fulfills the promises it made to you and your employees. If you've done your research right, the large company should care enough about its reputation with your people to treat them at least as well as they promised when you negotiated the acquihire.