Building a strong tech team is one of the biggest challenges any startup will face. From product-market fit to post-Series A scaling, the way you hire engineers can make or break your momentum. At Ivy Tech, we have seen what works (and what does not) across dozens of startups. This blog pulls together what founders need to know when building lean, effective tech teams that actually scale.
Startups are often racing against the clock. Budgets are tight, runways are short, and investor expectations are high. But hiring mistakes can be expensive. Bad hires can cost startups significantly in both money and morale.
The trend of tiny teams and the expectations of investors that startups have smaller teams that produce more, means the hiring has to be bang on!
That is why it is crucial to make smart hiring decisions from the beginning. The model you choose, whether freelancers, outsourcing, or co-employment, can shape your speed, cost base, culture, and even valuation. According to a Harvard Business Review study, hiring the wrong people early on is one of the top reasons startups fail.
Here we give you an overview of the different structures of building a team, the pros and cons and roughly associated costs:
Freelancers can feel like a quick win. Platforms such as Upwork or Toptal offer immediate access to global talent without the commitment of a full-time hire. This can be useful for early-stage startups tackling a defined feature or MVP scope.
However, the flexibility comes at a cost. Daily rates for experienced freelance engineers can exceed £1,500. Moreover, these contractors often juggle several clients at once, which affects consistency and dedication. According to Statista, over 4.4 million people in the UK participate in the gig economy, but not all are available full-time or committed long-term.
Freelancers are best used for one-off deliverables or short-term support. If you do choose this route, vet thoroughly. Our practical guide on hiring external recruiters includes questions you can adapt for freelancers as well.
Engaging a software outsourcing agency can help fill skill gaps quickly. This is especially common among UK companies. A YouGov report found that 21% of UK businesses outsource IT and software development tasks. Top reasons include cost savings, access to specialised skills, and faster delivery.
However, outsourcing means you often get whoever the agency has available at the time. Founders may not have a say in individual hires, and the developers may not be aligned with your product vision. This can cause communication gaps and misalignment. Outsourcing can work well for support systems or maintenance projects but tends to fall short for core product development.
If you go down the outsourcing route, we recommend you work with a local technical co-founder or fractional CTO who has the capability of managing the relationship with the agency and the outcome of the product.
For more on this topic, see our post on onshore vs nearshore vs offshore development.
This is where Ivy Tech’s Ivy 360 model comes in. Ivy 360 is a co-employment solution designed specifically for startups looking to scale quickly without sacrificing control or quality. Your developers are legally employed by us, but you direct their work as if they were your in-house team.
This is not outsourcing. These are your developers, full time and 100% dedicated to you – selected to match your team and culture. You lead on delivery, product vision, and culture. We handle compliance, payroll, local labour law, and admin.
The results speak for themselves. One client retained the same Ivy 360 developer for over four years, integrating them fully into their leadership team and product roadmap. According to McKinsey, long-term alignment and retention in tech teams directly increases product velocity and organisational stability.
And it is not just about loyalty. Co-employment models like Ivy 360 offer a cost advantage too. Global employment platforms such as Deel and Remote report that their clients save up to 60 percent compared to London salaries by hiring internationally while maintaining compliance and benefits.
You can use our cost calculator tool for free to see the savings for yourself here.
Unlike standard Employer of Record platforms, Ivy 360 is built solely for tech teams. We go beyond just paperwork. We help scope roles, run technical vetting, and onboard candidates seamlessly. We then act as a people partner, conducting 1-2-1s, activities, team building and celebrations. Plus, when the time comes, we support straightforward “buyouts” so you can bring developers onto your own books.
We focus our efforts on high-talent hubs in Portugal and Ukraine, which allows startups to hire exceptional engineers who are already used to working in product-led environments.
In the earliest stages, pre-seed to seed, it makes sense to hire flexibly. Freelancers can help you test ideas without long-term commitments. As you grow and secure investment, stability becomes more important. This is where Ivy 360 shines. You keep costs predictable while building a dedicated team who feels like your own. By the time you reach Series B, investors will expect an in-house team. At that point, many of our clients choose to bring their Ivy 360 hires in-house.
For more thoughts on this progression, see our post on how a strategic hiring plan drives business success or our hands-on guide on how to hire for your startup.
There is no one-size-fits-all model. But for most UK startups, the smartest route is one that offers speed, flexibility, and long-term control. Ivy 360 gives you all three.
If you want to build a scalable tech team without losing time, money, or momentum, explore our services or get in touch. We would love to show you how Ivy 360 works in practice.
