The fossil record is incomplete because it takes an extremely specific set of circumstances for a dead plant or animal to become a fossil. The vast majority of living things simply die and decompose without leaving a permanent record of their existence.
In order to form a fossil, a decomposing organism must be covered by sediment relatively quickly after dying. The sediment forms a mold around the remains, allowing mineral deposits to replace the organic material and form a fossil. Without this protective layer, a fossil cannot form. Species that lived in and around areas rich in sediment are more commonly represented in the fossil record, while those in different environments may be more difficult to find as fossils.