Kirill Gurskiy is Managing Director of GEM Capital, a leading Cyprus-based investment firm with a focus on game studios.
In the competitive landscape of startup funding, a seed deck isn’t just a formality. It’s a startup’s first impression and often the only chance to capture an investor’s attention.
As a seasoned VC investor, I review dozens of seed decks monthly—some brilliant, some promising and some that make me go “no thanks.” The latter category usually contains red flags that most investors never close their eyes to. Here, I’m going to uncover these red flags.
1. No Sound Validation Of A Problem And Market Potential
A common mistake founders make is rushing to present their solution without clearly defining the problem first. They forget to explain its urgency, pain points and why it matters. Deprived of this foundation, even the most innovative solution risks becoming a nice-to-have rather than an essential, significantly increasing product risk.
In addition, founders often fail to prove there’s a large, paying customer base for their offering. This is the classic dilemma: “There’s a gap in the market, but is there a market in the gap?”
A deck claiming that there’s no competition is a mistake, too. It means you’ve either failed to research the market or are in such a niche space that the opportunity is tiny. Competition validates demand, and investors want to see that you understand the landscape and can differentiate your product.
It’s only when these two critical points are addressed that you should introduce your solution.
To mitigate this red flag:
• Validate the problem with real customer interviews, surveys, user quotes and market statistics to demonstrate that the problem exists and is widespread.
• Clearly define market size—total addressable market (TAM), serviceable addressable market (SAM) and serviceable obtainable market (SOM)—moving from the broad picture to the realistic segment you plan to capture.
• Sell your solution by convincing investors that your company offers a highly specific, differentiated value proposition that resonates deeply with a defined customer segment and can capture a meaningful market share.
2. Fuzzy Financials And Unrealistic Projections
Even with a compelling vision, inadequate financial planning is a deal-breaker. A seed deck showing wild projections with no clear path to get there doesn’t induce trust.
Founders often:
• Show a lack of focus by over-diversifying revenue streams.
• Present overly optimistic projections with no justification.
• Miscalculate funding needs and ask either for too much (leading to excessive dilution) or for too little (resulting in an inability to meet milestones).
Financials reflect a founder’s understanding of the business’s viability. If numbers are not well-reasoned or seem arbitrary, it screams that you haven’t done the math and reveals poor strategic planning.
To avoid this red flag:
• Ground financial forecasts in solid assumptions and market research.
• Explain how investments will drive growth and achieve key milestones.
• Show early traction if it’s possible—whether through revenue, early customers, engaged users, partnerships, waitlist signups or prototype feedback.
3. Founding Team With No Skin In The Game And Little Expertise
Investors aren’t just hunting for ideas; they are searching for people. If founders aren’t investing their own money or time into their business, it raises serious concerns about commitment. A team still working other full-time jobs while pitching their startup sends a clear signal: They aren’t all-in. Investors are more likely to back founders who eat, sleep and breathe their startup.
Beyond commitment, VCs equally scrutinize the team’s expertise and composition. An inexperienced or unbalanced team significantly raises execution risk—potential struggles to navigate competitive markets, outperform rivals and continuously refine the product. Investors look for founders who combine unwavering dedication with the right skills to turn vision into reality.
To counter this red flag:
• Prove commitment by demonstrating full dedication through personal investment and full-time focus on the venture.
• Showcase unique expertise by highlighting your team’s relevant experience, track record and specific skills, explaining why your team is suited to execute the idea.
4. Cluttered, Overloaded Deck
Overwhelming investors with too much information is another common pitfall. Slides with a wall of dense text, complex charts or excessive jargon almost immediately lose interest, no matter how good the product is. A pitch deck is a high-level overview, not an exhaustive document. A confusing narrative or flow leaves investors disengaged.
To fix this red flag:
• Cut unnecessary details, highlight key points with bullets and visuals and keep language clear and jargon-free.
• Build a persuasive story by using memorable hooks and concise takeaways to ensure investors remember your message.
5. Early Equity Dilution And Governance Gaps
Excessive early equity distribution creates multiple problems that compound over time. When founders give away too much ownership to early hires, advisors or friends, they risk two critical failures:
• Diluting their own stake below the threshold that keeps investors comfortable.
• Creating an imbalanced cap table that becomes a problem during future funding rounds.
This issue rarely exists in isolation. Poor equity management usually goes hand-in-hand with governance gaps, whether it’s unclear vesting schedules, poorly defined board structures, murky decision rights or improperly documented intellectual property ownership. When combined, these missteps compound risk, exposing systemic disorganization that makes investors doubt the team’s ability to scale.
To address this red flag:
• Maintain healthy founder equity and be mindful of dilution.
•Use equity grants strategically, with vesting schedules.
• Ensure clear vesting and cap table transparency.
• Work with legal experts early, especially in regulated sectors like fintech and healthtech.
Treating a red flag in a seed deck as just a minor oversight is a mistake. Each of these red flags is a flashing warning sign pointing to deeper, systemic risks that can derail a startup before it even begins. A pitch deck should proactively address these issues to simply secure the next meeting with a VC that may be followed by their “yes, please!” instead of “no thanks” right after seeing your presentation.
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