As science and technology start-ups are navigating their way to profitability, they often raise early-stage funding to prove that their technology and business models work and that the market wants what they’re selling. When that takes longer than expected, companies can find themselves running out of cash and still nowhere close to reaching the milestones necessary to raise the next round of  funding. This is what’s commonly called the dreaded and ominous sounding “Valley of Death” — that gap between when a company first receives funding and when it begins generating steady revenue from paying customers.

It’s a lonely place no entrepreneur wants to be, but it’s also not an uncommon destination, with countless companies failing in their first few years of business. And when you reach the Valley of Death, you’ll need to make some very difficult decisions about how to best reach your milestones with the limited resources you have left. It’s never pretty, and you don’t want to have to navigate the Valley of Death if you can avoid it. Here are 10 suggestions for how companies can improve their odds at sidestepping the Valley of Death in the first place.  

Seek non-dilutive funding from foundations and government organizations

Not all types of funding are equal; some types are much more expensive for business owners than others, while others can have fewer strings attached. New science and technology companies should first seek out non-dilutive funding from foundations and government organizations. For example, if you are a licensed company, government agencies like the National Science Foundation and the National Institute of Health offer Small Business Innovation Research (SBIR) grants, where you can use their funding to continue the company’s research and development, or product development. The SBIR made a staggering $75B in grants in 2013  – compared to $29B of VC funding in the same year. Especially in the early stage where possible, rely primarily on non-dilutive funding.

Explore angel investors as a source of funding

Angel investors are another option early on that entrepreneurs shouldn’t overlook. VC firms don’t usually come in early because of the high technology risk and the unjustifiable investment cost –when VCs are only investing a few hundreds of thousands dollars (remember these are early stage science and technology companies), deal sourcing for and evaluating these complex companies  can be very expensive in a relative sense. Angel investors often fill the void. Even if you think you are close to securing VC funding, you should consider raising angel financing.

Keep in mind that pitching an angel investor on your business is different from pitching a VC firm. Generally speaking, angel investors are keen to invest in what they strongly believe in and are very passionate about. Earlier this year, Propel(x) collaborated with Breakout Labs, the MIT Alumni Angels of Northern California, and innovation Node – Los Angeles, a national node of the National Science Foundation Innovation Corps (“I-Corps”) Program, to field a survey of angel investors to better understand their views and motivation behind investing. What we found was that angel investors are looking to invest in something that would profoundly impact the world we’re living in. They are looking for legacy and impact.

With that in mind, when pitching angel investors, be sure to highlight the social impact of the company, rather than exclusively focusing on returns. Don’t make the mistake of underestimating the importance your overall mission can have for many potential angel investors.

Always keep an eye on the horizon

One of the worst things about the Valley of Death is that it can sneak up on you, often being closer than it appears. Generally speaking, the fundraising cycle for a deep science and technology company is slightly longer than that of a consumer or enterprise technology startup, because their businesses (and the technology behind them) can take longer to bring to market and are harder for investors to understand. Add to that an unpredictable approval process for life sciences companies, and you have all the reasons you need to plan ahead.

If you have only six months of cash reserve on hand, you should immediately start looking at the next round of fundraising. Keep your options open. That investor you’re expecting to come through next week could be planning to pull out. Not all of your plans will come through, which makes it necessary to have several back-up sources of funding at the ready. It’s always tragic for a company to see the light at the end of the tunnel only to be one or two months away from reaching that light and running out of cash. So plan ahead, especially in the science and technology field.

Raise slightly more money than you think you’ll need

As a general rule, it’s best to raise a little bit more than you think you’ll need to give yourself a cushion. Markets can change and often do. For example, even if a company was doing well at the beginning of 2016, we saw VCs begin to retreat from investing in high-quality, post-revenue types of companies, which was unheard of in the past. We’ve seen VCs become more risk averse and money become more difficult to come by, so when you do have access to cash, build in a slight cushion for yourself. That cushion could help you avoid the Valley of Death.

Take full advantage of online investment platforms

Young companies should also keep an open mind when it comes to crowdfunding. Some founders of smaller companies have already moved to online fundraising, or crowdfunding, which has been a revolutionary change in the industry. Instead of meeting one-on-one with multiple VCs, crowdsourcing enables you to make a single pitch on a platform that focuses on your type of technology. For example, if you’re a deep science and technology company, you can go to a platform like Propel(x), where you have access to a crowd of interested and knowledgeable investors.  

In addition, the better investing platforms can help bridge the knowledge gap between the company and investors. Not all angel investors may understand the complexities of the technologies involved in your business. You’ll want to be on a platform that adds insight to the business and has the infrastructure in place to help investors make informed decisions. At Propel(x), we gather top industry experts to help vet the technology, and walk the investor through the risks and opportunities of each company.

Consider raising bridge rounds to get you through the lean times

A bridge round of financing can help companies make it through the Valley of Death. Companies generally raise a bridge round once they already have an original round of financing, but need more time before raising their next round. In the science and technology field, bridge rounds are not uncommon, and angel investors and investing platforms like Propel(x) can help facilitate them.

Explore incubators

Another step that can prove incredibly helpful in avoiding the Valley of Death is getting involved with an incubator that specializes in your field. If accepted, some of the incubators will give you some initial funding to help the company scale. Later on, the incubator can help your  company grow and mature through business modeling, leadership development and by providing access to R&D and marketing infrastructure.   

Great examples of successful science and technology incubators include Breakout Labs and Cyclotron Road. They really support early stage science and technology based companies beyond funding. And their true value lies in their vibrant ecosystem of early stage companies united by their goal of changing the world.  

Meet with strategics as soon as possible

Another prudent step startups can take is to develop relationships with strategics early in your company development. This is crucial to hard-science-based startups because many of them find their exit through an acquisition by a strategic. Lately, we’ve been seeing a trend of strategics investing in companies earlier and earlier. Today, it’s not uncommon to see them investing in Series A and B, which was unheard of just a few years ago. Not only can strategics help with funding, but they can also become customers, helping you grow organically and making it less necessary to raise external capital. We recommend having strategics look at your business as early as possible.

Avoid overpromising

As entrepreneurs, our gut instinct is to put our best faces forward. That can be a good thing, but it can also get you into trouble if your “best face” is based on wishful thinking. Be upfront and realistic with potential investors. I’ve seen companies that thought of themselves as a hot commodity explain that they were weeks away from locking up a large amount of investment, only to see them a few months later and hearing the same familiar line about closing in on funding. The resulting impression is not a good one.

You can showcase your company, but avoid overpromising, which can hurt you in the long run. Also, keep your options open. Sometimes, sure things end up not panning out. Markets are notoriously difficult to predict. Identify as many alternative funding sources you can find, stay humble and prepare for the worst possible scenario. Just don’t over promise.  

Don’t be too secretive with potential investors

One mistake we’ve seen new science and technology entrepreneurs make is being too secretive with investors. Protecting your idea is one thing, but companies can go overboard when it comes to secrecy and end up turning potential investors off. I’ve seen companies try to get around explaining what they are really doing by asking investors to look at their backers and trust in their backers’ decision to invest. That doesn’t work much any more in science-based startups. The best companies have faith in their solid technological advantages and don’t worry about being too secretive because they know that they are way ahead of what any competitor would be able to do.

I’m not suggesting that you be reckless. If you are working in a very competitive space and are neck and neck with multiple competitors to get to market, that’s a different situation. My point is that in general, you shouldn’t be too worried about qualified investors doing due-diligence on your company. Serious investors will conduct serious due-diligence. It’s actually a good thing. If you want them to invest, you’re going to need to give them insight into your company and what you are doing.  

It’s an exciting time to be starting a company

Being an entrepreneur is hard work, and the Valley of Death is always out there, just waiting for companies to enter. Even so, building a company from the ground up can be incredibly rewarding. Some people might call entrepreneurs irrational. After all, why would we put ourselves out there when the odds of success are so small?  Given what’s at stake, “rational” people might be dissuaded by the risk, but we understand the need to try. Something inside us pushes us forward, and with the right leadership team and the right committed investors, anything is possible.

So while the Valley of Death cannot be ignored, it doesn’t have to be your future. There are plenty of other destinations with much more arresting (and rewarding) vistas. I wish you all safe travels on the exciting road ahead.