Any startup while expanding and hiring tech talent, always looks for the high quality talent which can fit its bill. Even if the company is able to tap into high quality talent pool (through innovative marketing techniques etc.), when the talent joins the startup, they are exposed to code / culture / practices which are not industry standards due to mediocrity in founding team. The new recruits will miss high quality design discussions and coding practices. Ultimately, it leads to job dissatisfaction and the talent eventually quits.
As a result, the startup end up maintaining bunch of mediocre developers which in turn produce mediocre developed features / products containing bugs. This in turn increases the cost of development, as the startup has to:
Invest time in fixing bugs (one team might allocate x% of its time in sprint to fixing bugs) and
Hire a larger than necessary QA team which will need to rigorously find out bugs from the buggy code, report it and get it fixed from the developer.
This whole cycle adds unnecessary cost and huge waste of time.
Ultimately startup lags behind the superior competitors and ultimately dies.