Some team structures and features are so much of a red flag to investors that it’s hard for them to believe in you.

👤 Solo teams

Possibly the most obvious red flag is a team of one. Investors are sceptical about one-man (or one-woman) bands, even at pre-seed. The reason for this is, can a solo founder build a team? If you haven’t convinced someone to quit their job (and all the potential security that offers) and work on your after-hours startup without any pay for that length of time because they believe in the vision, then how do you expect investors or future customers to be convinced? You need two to three key people.

📉 Lack of traction/experience

It’s theoretically possible to do all this as a group of fresh university graduates, but in reality, it’s a lot harder to get money in your hands without any experience. Investors want to see some level of past success or traction that demonstrates that you can deliver on your idea and that you have ‘skin in the game’. So, if your team doesn’t have experience, get yourself a co-founder or team member who does.

📝 Complicated team structure

If your team consists mostly of employees without significant stakes in the business, it can signal a lack of commitment and shared vision.  Investors want teams in which key members aren’t just working for a salary but also have significant investment risk involved in the venture (e.g., co-founders). This shows that the core team is genuinely dedicated and has a vested interest in the startup's success.

🌐 Lack of domain expertise

Investors look for founders with founder-market fit. The founder has a clear understanding of the market they are entering: either the founder personally has experienced the pain points of the market they are entering or they have worked in the industry before. This is powerful because of the understanding and personal connection the person has with the problem. If you don’t have that knowledge, you need at least one person on your team to have it.