One startup I worked for hired good people organically, basically by having a realtively altruistic mission (educational products for young kids) and good PR.

One startup I worked for hired good people organically, basically by having a realtively altruistic mission (educational products for young kids) and good PR. You can be creative about it though. A story: when the startup was small, a maths student applied to work for us as a programmer. They were very smart and had a good personality, but were naive about their very limited programming experience. Most companies would have passed. Instead, the team lead said to them: I don't have time to mentor you, but if you can find another student with good programming experience who I like, and can mentor you, I will hire you both. And so they did. So, a 'pass' was turned into two hires for the price of one. Of course, this probably only works if you can use new grads, who are all looking for jobs at the same time.