What’s a neutral way to explain hiatus in your startup’s development?

How about truthfully with no spin, instead of forcing people to read between the lines, assuming you are failing and not honest enough to come clean.

Courage is actually facing the elephant in the room that you are pretending no one else knows and addressing said pachyderm head-on. The hardest failure to recover from is credibility.

Tell them you did a 180 pivot and a 180 pivot back.

"It turned out that we needed a timeout, which of course slowed down our ongoing work. But this gave us time to regain power and gave our concept time to mature. Wait for good news!"

Dang, no other suggestions? Come on, people! Others in same boat want to know.

My advise is be brutally honest about it. You don't need to disclose details that you don't wish to share, but just give enough so that the person can relate. Just make sure it won't come across as a bunch of excuses. Chances are most people can relate because shit happens in life. And startup is damn hard. And if they can't relate or empathize, well then you don't need to care because they won't be a good match for you anyways for whatever relationship you are going for. So move on. The most important thing is to signal that you are trying your best to move forward and have a concrete plan doing so.