Can trade secret protection really be an alternative to patent protection for startups?

There are two major risks associated with using trade secret protection instead of patent protection. The first is what you have picked up on - you may wish/need to disclose your technology in order to secure funding. You should be able to hold certain discussions "in confidence", but having to keep the invention(s) secret is likely to make the task more difficult, and you would not have as much peace of mind that your inventions were protected. The second type of risk is that a completely unrelated third party could develop the same technology independently of you, and you would have no protection against that third party. A patent is a monopoly right, meaning that even if a third party develops the same invention independently of you, they cannot work the invention commercially without infringing your patent. If you are confident that the invention can be kept secret, could not be invented independently by a third party, and would not need to be disclosed to raise funding, then perhaps trade secret protection would suffice. However, if you have a patentable invention of commercial potential, and you would like greater security of protection for it, then I would consider patent protection further.

Perhaps you need to sit and down and figure out exactly what is the value that you wish to protect. Keep in mind that with software, any functionality can be duplicated (in time). Trade secrets is essentially based on the relationship and the legitimate means of accessing or deducing that secret, so whilst a non-compete can be enforced with employee, your competitor can reverse engineer your product with no recourse. Your secret could be preserved via keeping core software on a limited number of servers (PaaS), careful marking of documents with warnings (in confidence or privileged) and generally IT security practices. Courts need to be convinced that you adequately secured your "property" but keep in mind that "property" does not usually extend to vague business ideas as there may be multiple alternatives in a small space. So understand that "protection" is only with those you have a formal relationship with as evidenced by legal agreement, not to unrelated third parties and does not apply to information which is generally "known" (know-how v proprietary knowledge).