As you insinuate in your question, the direction you go on this decision depends on whether you want to build a huge user base, or a highly qualified and more tailored user community.

You might consider "having your cake and eating it too" -- at one SaaS startup where I ran marketing, the conversion and traffic numbers were huge and the funnel was everything. But we asked for a lot of info up front, which trimmed the total potential universe of buyers. I advocated for breaking down the barriers to getting started with the software -- minimizing the fields needed to just an email address, so they could save their progress -- and allowing the user to see how the software works.

Once you make it easy for users to sign up and then demonstrate value, you'll establish trust, and they will be willing to give you the data you want.

So my suggestion is, consider a two-pronged data gathering / onboarding strategy (some marketers call this progressive profiling). Make it stupidly easy to get in and see how awesome the app is, but hold back a few choice features or capabilities and require incrementally more action(s) of the user to unlock those features.

Just another path you can consider. Good luck!