In the latest episode of our monthly podcast Pulse, Andreas had an enlightening conversation with Lotte Geldermans. She’s the lead portfolio & communications and first employee at Pitchdrive, an early-stage investor primarily focusing on SaaS companies. Based in Amsterdam, Lotte shared her invaluable insights into what early-stage startups should prioritize technically and how Pitchdrive helps SaaS startups navigate the complex waters of growth and investment.

Read: The Ultimate guide to Technical Due Diligence

The focus on technical due diligence and startup teams

A key takeaway from this discussion was the importance of technical due diligence in early-stage startups. Pitchdrive, known for its rigorous and partly automated selection process, looks beyond the often "messy" code of rapidly developing startups. They focus more on the intellectual property, legal aspects, and the composition of the tech team. Is it fully external, or is there a mix of in-house and outsourced talent? Interestingly, Lotte highlighted how startups like Hotel Manager successfully manage semi-external teams, blending affordability with efficient integration.

The role of technical co-founders and product quality

A recurring theme in the conversation was the significance of having a technical co-founder. While not mandatory, it certainly eases the journey. Lotte emphasized the need for a product-affinity mindset within the team, especially in the early stages when the founding team's influence is paramount. The discussion also touched upon the evolving perspective of investors towards external tech teams and how managing these teams effectively is crucial for rapid progress.

A particularly controversial yet practical stance taken by Lotte and Pitchdrive is their approach to code quality in early-stage companies. They prioritize product quality over code cleanliness, advocating for a 'quick and dirty' approach in initial phases. The rationale is straightforward - move forward and innovate rather than getting bogged down in technical perfection. This approach, however, does evolve as the company matures and seeks more sustainable growth and scalability.

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Final thoughts and advice for startups

This episode is a shallow dive into the realities of early-stage startups and the factors influencing their growth and investment potential. Her insights provide a valuable framework for startups navigating technical challenges and seeking investment. The key takeaway? Focus on product quality, efficient team management, and maintain a dynamic approach to development and growth strategies.