The Power of Deadlines + Fundraising Fieldnotes 4.16.24

If you're a founder trying to get better at fundraising, you've probably read a ton of blog posts, followed strangers on Twitter, and gone down multiple YouTube rabbit holes. You've come across concepts like the power of warm introductions, the critical importance of a great narrative, making sure you avoid the VC summer slowdown, etc.

Today I'm diving into a concept that seems extremely simple, but can actually make a huge impact on your fundraising: the power of deadlines.

If you've been around the block as much as I have- advising hundreds of fundraising founders, as well as hearing tons of pitches when I was a VC- you can really tell when founders are failing to use them, and suffering as a result.

First, what's a deadline?

Well, there's no trick or different definition here when you're applying it to fundraising. A deadline is a date and time when something has to be finished by.

But why do deadlines work so well within fundraising?

By creating a time container, deadlines introduce scarcity- a powerful trigger throughout all of human psychology, but especially so in fundraising. Setting a deadline helps a founder exert some amount of control over the process, helping you appear more confident and attractive to VCs. Power dynamics are important here. It’s all too easy to be deferential and relinquish all power to the VC who holds the money you’re dying to get.

The problem is that if the founder willingly cedes all their power to the other party, it signifies that they’re desperate and have no other options. That’s a terrible signal for VCs, the exact opposite of generating FOMO and heat for your deal. There’s no impetus for them to act if they believe they’re the only game in town.

By setting deadlines, a founder is able to gain a little bit of control and balance out that power dynamic to squash some of those negative signals.

Bottling Up Energy Through Deadlines

The goal of Calendar Density, or scheduling most of your first investor meetings during a tightly packed, 2-week period of time, is to produce positive signals and pressure that steers investors into feeling the need to invest. For example:

• You’ll be more stringent with investors who ask you to reschedule (since you have a ton of other meetings lined up).

• You’ll naturally mention other investors you’re in conversation with. A subtle way to introduce third-party interests into the process is to mention their intentions. For example: "We expect this party to submit __ by this date __. We encourage others to follow suit."

• Even after getting a pass, it’s easier to maintain confidence since you won’t have time to dwell on every little thing an investor said. You still need to prepare for the meetings with all the other better-fit investors on your calendar!

Calendar density is only possible by setting time boundaries to your process. If someone promised to make an intro for you, are they more likely to follow through with it if:
A: You give them a specific time period you want the meeting to happen, or
B: You leave it open-ended?

Investors Appreciate Deadlines!

A lot of founders are scared of setting deadlines. It invites your contacts rejecting or never getting back to your requests and forces you to confront scenarios you’ve been avoiding. However, a direct 'no' is better than indefinite silence, which is often what you get if you never set a deadline.

If you are polite and give people a reasonable timeline for them to operate within, the deadline won’t be the reason they’re saying no.

You may also be uncomfortable with setting deadlines for investors you’ve never met before. But I know from first-hand experience as a VC that they have so many competing priorities from portfolio companies, team members, bosses emailing you, new deals coming in, etc. that prioritization is a constant battle. When founders set deadlines, it helps VCs prioritize their actions. And if they do end up passing, it won’t be because of the deadline- they would have passed anyways, and it’s better that you were able to get to that no instead of dragging it out.

Effective Deadline Setting

Be reasonable about your level of aggression while setting deadlines. If you’re at the beginning of your process and there’s no competition around your deal, don’t tell people you need term sheets by the end of next week.

Instead, the language you use for your first versions of deadlines can be a bit softer- “We expect to close things by__” or “Our plan is to run a process starting __ and ending around __, can you work within that timeline?” Setting up deadlines for each step (like scheduling the next call, when to expect feedback from partners, etc.) and not just at the end can you help control the pace of the process.

Remember that people actually need time to do the work and diligence in order to get comfortable and excited about your deal. If you really have multiple options and you’re gathering momentum, then you have valid reasons to be more aggressive. Balance that with remembering there’s another person on the other side of the table. Always use a calm, confident tone, not an aggressive or manipulative one.

As you begin applying deadlines to your fundraise, you’ll see more opportunities to use them in other areas of your life. Sprinkle some deadlines into your emails and text messages and see how much things change for you.

Let me know how it goes!

Be chased,
Jason

Don't sleep on the impact of associates at VC firms. Of course you want to connect with partners, but you shouldn't avoid associates

Advice is hard to hear... know that so you can try to accept the good pieces of advice that get thrown your way

So demanding!

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