Deciphering: “What’s your timeline?”

How to respond to a timely question…

When a VC asks you “what’s your timeline?”...  What should you say?

A common way I support founders in the fundraising process is by helping understand VC comments and questions. Enough of these come my way on a weekly basis that it’s time to turn it into a regular segment within the FF newsletter. We'll call it “Deciphering” 

A recent question about timeline

Last Tuesday, a founder wrote to me saying a VC just asked her what her fundraise timeline was. She replied saying they just got started and hadn’t set a hard deadline yet.  Immediately afterwards, she was concerned that her answer was a terrible one and wrote to me for reassurance.

First a comment on advice 

Before I directly respond, first a quick side comment on “how should I respond” requests. 

The truth is for any “How should I respond to ______” for a VC question, the answer is incredibly situation specific. Situations with seemingly subtle differences can require vastly different answers. 

So in most cases, when we talk about how I would answer something, I will focus on illuminating the underlying intentions of the VC. Better understanding the intent of the question will help readers creatively determine the answer they would need to give based on their own situation.

In this case, “what's your timeline” was the question. When a VC asks what a founder’s timeline is, they're looking for two main things. 

The goals of “What’s your timeline?”

First, on a straightforward level, a VC wants to know if they have sufficient time to figure out whether or not this is a deal for them. They truly want to know if the deal might be closing soon. If it’s deep into the process already, they’ll have to move fast to catch up. If the deal is even deeper and looks like it’s close to closing, then it might not be worth their time to even try. 

Next, besides the logistical understanding of the timeline, they're also fishing for whether or not there's actual demand for the deal. Are other people looking at the deal? Is it going to be competitive? 

Finally, the question helps the investor size up the founder. Are they organized? Do they know what they’re doing with fundraising? If I’m interested in the deal, how sophisticated will this founder be in negotiating…

With all those elements, you can see how your answer will vary based on the circumstances of your company and fundraise. 

Guidance for responding

At a high level, I ideally want you to give an answer that shows demand for the deal. It should apply a light amount of pressure to the VC so they know they don’t have all the time in the world.  On the other hand, you can’t apply too much pressure. If you over do it like “you only have 48 hours to decide” they could believe the ship has sailed and they wouldn’t be able to catch up no matter how interested they were. Lastly, your answer should drive towards next steps to help them prioritize action. Overall, if you’re actually raising make sure they know there’s structure to your raise and that it’s moving.

Here’s one example of a good answer. Disclaimer: remember that answers are situation specific so this example might not apply to you! 

“What's my timeline? Well, I’ve had a couple early meetings but most of our first meetings are scheduled over the next two weeks. I’ve been really happy with the response so far. More and more investor intros keep coming in and and so I think *knock on wood* the process will continue to run smoothly. I don't know how long processes are taking nowadays, but we hope to wrap this up sooner rather than later. We'd love to get back to work.”

Notice these elements

• Indication of early interest - “had a couple early meetings” 
• Running a process / driving a timeline - “first meetings scheduled over the next two weeks…”
• Ambiguous reference to lots of meetings (demand) - “first meetings scheduled over the next two weeks…”
• Confidence in a quick close, push that they need to move on this - “don’t know how long processes are taking, but hope to wrap up sooner rather than later. We’d love to get back to work”
• Nod to being a good operator - “We’d love to get back to work”

Fundraising under duress 

If your fundraise is in a precarious position where your timeline is driven by a cash out event (when the company cannot continue due to lack of cash), you’ll want to be careful with how you respond. In these situations, you want to maintain the ability to have an initial conversation before they get the full picture. Hearing you’re about to run out of money will taint their perspective before you get to share the exciting parts of the opportunity. Your goal is to get investors interested in what you're doing before any indications about your runway come out. 

This isn't to say you should hide details or be disingenuous about how much time they have. But if you can avoid the question and get them excited about the company before that detail comes out, you're going to be in a better place. Investors that get excited about a founder and an opportunity who then realize there’s limited time for the company will go into problem-solving mode and try to make sure they can be a part of the force that brings you to the next level.

Let’s recap:

When an investor asks you for your timeline, this is what they’re trying to accomplish:

• Determine how much time they have to perform diligence and make a decision. Is this deal closing soon, & how fast do I need to move? Is it too late?
• Searching for indications of whether there’s really demand for the deal and how competitive it will be.
• Size up the founder - what is the founder’s fundraising experience, what can I expect when negotiating with them?

Your response should trigger feelings that get an investor to lean in and inspire them to take action. The example above may be just 1 short paragraph, but it contains powerful signals. Use it to inspire a response that aligns with your situation, and you’ll be off to a great start.