Today, the iGaming industry has never been more open to investment. There are 10+ dedicated funds with multimillion-dollar reserves, over a thousand angel investors, and dozens of investment platforms for pitching and networking at the world’s biggest industry conferences.
So no — the problem is not the lack of capital.
Yet from our experience at Xanada Investments, 8 out of 10 startups still get rejected, and their search for funding drags on for months or even years.
Let’s break down the most common weak points we see from pitch to pitch, the ones that make me and other investors say “no”.
The Product Is Just Not Strong Enough
This is the number one reason for rejection, at least for me personally.
It doesn’t matter how professional your team looks or how passionate your pitch sounds; if the product is weak, non-competitive, or doesn’t have a real audience right now, it’s not investable.
I see a lot of founders chasing “future concepts”: AI casinos, metaverse gaming, and Web3 loyalty systems. All exciting ideas, but most of them have no clear market today.
That’s why you often see brilliant-looking projects that seem “innovative” but attract little interest or investment; they end up sitting in backlog, not in business.
Unrealistic Business Projections
Beautiful charts, overpromised growth curves, poorly calculated budgets, no risk management, and fuzzy profitability models – all of this signals a lack of realism.
At the pitching stage, the founder is, in a sense, the salesperson of the project. Their job is to convince the investor that the business will be profitable and deliver results. That’s fine, but when we see unclear numbers, unrealistic projections, or claims of full ROI within one year, it tells us the team doesn’t understand what it takes to build a sustainable business.
The clearer, more structured, and more realistic your financial plan is, the more confidence you give investors that you actually know how to bring a startup to profitability and understand the challenges along the way.
The Team is Not There Yet
One of the first factors I evaluate is the team, its experience in the specific type of business it’s building and its track record of achievements. There must be a strong reason for investors to trust you with their money and time and believe that this team can actually deliver results.
I also look at readiness and maturity, both professional and mental.
- Are the founders aligned?
- Do they complement each other?
- Is there personal chemistry and trust between them and the investor?
Sometimes investors won’t say this directly, but timing matters. Don’t rush to build a startup just to “be a founder”. Do it when you’re ready, when you have the right co-founders, and when you truly understand what you’re building, why, and how. Because even strong ideas die early, not due to market failure, but due to immature founders or conflicts within the founding team.
No Potential for Growth
Even if a product is strong and the market looks decent, investors will reject a startup if there’s no clear path to scale. We’re not here for charity; after all, we’re here to make money.
Investor logic: Giving $2M to a business that cannot realistically return $4M–$6M or more is just bad capital allocation. Investors want startups with a repeatable, scalable model and a clear strategy for capturing new markets, users, or revenue streams.
Meaning, if a business falls into either of the two categories below, I’m sorry, but you will hear a ‘no’:
- No scaling strategy: Founders can’t explain how they’ll grow beyond a single market, operator, or segment.
- Naturally limited business potential: Even at full penetration of the current market, the revenue won’t produce meaningful ROI. Moreover, if regulatory frameworks change tomorrow and the market closes, it could all be lost.
Other Reasons That Don’t Depend on You
Sometimes, the rejection has nothing to do with your startup’s quality or potential. Investment funds are also companies, with their own internal rules, strategies, and portfolio logic.
A “no” might simply mean your project doesn’t fit their current investment focus. For example, a fund may currently be investing in payment solutions or affiliates or platforms, not new game providers, or they may already have several similar projects and want to keep their portfolio diverse. That’s why before reaching out to an investor, it’s smart to do your research. Find out what industries and markets they focus on, what stage they invest in, what kind of startups they usually back, and what they expect from founders. It’s much easier to get a “yes” when you’re speaking to someone who’s actually looking for what you offer.
And let’s not forget, investors are people too. Sometimes you just don’t click. Maybe your visions for the industry differ, or your communication styles don’t match. And that’s okay.
A “no” doesn’t always mean never. Sometimes it means not now, or not with this fund.
Vladimir Malakchi, CEO & Managing Partner at Xanada Investments