I answered this question on LinkedIN today, and thought the response would be of interest to our readers:

At what point do startups need outside help to find the right people for their open positions?

Start-ups need outside help in recruiting under three circumstances:

1. The need for talent goes beyond the contact base of the founders and their acquaintances. This could be for greater technical skill, Sales execs who can establish strategic partnerships, Ops people to set up efficient systems, etc.
2. The need for talent goes beyond the “available” pool. If you assume that 60-90% of people looking for jobs are “B” players, and if the start-up needs “A” players to take it to the next level, achieve traction, get funding, then those “A” players are not “available”. They have their heads down working for another employer. Only a search firm can cast a wide enough net and gain access to these people.
3. When they can afford it. In Angel or Seed Capital rounds, the money just isn’t there to hire recruiters (internal or external). Usually in a “B” round, the money coming in (multi-million) is sufficient to pay search fees, and most of the money is geared to new hiring, so that is the right time to invest in hiring help.

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