Photograph by Tom Hawkins

Matt Mickiewicz left 99designs to start DeveloperAuction, an online marketplace that matches engineers and employers.

As co-founder of web startup 99designs, Matt Mickiewicz relied on 30 recruiters to find engineering talent for his company in the hyper-competitive market of San Francisco. Results were so poor that when one finally got a prospect hired, the recruiter sent 99designs a box of Krispy Kreme donuts as a way to say thanks.

It came with a bill for tens of thousands of dollars.

Frustrated by the inefficiency of the hiring process, Mickiewicz left 99designs a year ago to start Developer Auction, an online marketplace that matches engineers and employers. Since starting the service in August, the company has signed on 400 companies and helped facilitate $225 million in job offers.

To keep growing the 13-person startup, Developer Auction announced today that it raised $2.7 million in a venture financing led by New Enterprise Associates and Sierra Ventures. Crosslink Capital, Google Ventures, SoftTech VC and Step Partners also contributed.

“We’re disintermediating recruiters and agencies and allowing companies to compete for talent on equal footing,” said Mickiewicz, 29, who co-founded the company in San Francisco with web entrepreneurs Douglas Feirstein and Allan Grant.

Developer Auction picks 150 candidates every month — out of  thousands of job seekers signing up on its site — to engage in a two-week auction process with employers. Companies get to look at the profiles and submit interview requests to those they like along with compensation information. Engineers can choose to accept the interview and, if there’s a match, an offer is extended.

For successful placements, employers pay Developer Auction 15 percent of the new hire’s first year of salary, and the service then gives 20 percent of that fee to the employee as a signing bonus. In its first year, the company is on track to record millions of dollars in revenue, Mickiewicz said.

In addition to competing with traditional recruiters, Developer Auction is  taking on LinkedIn, which has more than 200 million members. According to Mickiewicz, demand for programming talent is so great in the Bay Area that any engineer with a Stanford degree in computer science and some experience at Google or Facebook is inundated on a daily basis with LinkedIn messages from recruiters. He equated that approach to hiring as spamming, and Mickiewicz avoided using the professional-networking site when he tried to fill positions at 99designs.

He’s now hiring through his own site, competing for talent with his customers. Of the five engineers at Developer Auction, three were hired using the service, Mickiewicz said.

Other companies turning to Developer Auction include Groupon, Lookout, RichRelevance and AdRoll. And, somewhat ironically, news-reading service Pulse is also a client. That’s the startup LinkedIn is reportedly buying for up to $100 million, according to AllThingsD, citing people familiar with the matter.

Hani Durzy, a spokesman for LinkedIn, declined to comment.

Original post is How Donuts Gave Rise to Site Where Employers Can Bid on Engineers by Tech Deals.

By using Upstart, graduates in just about any field can raise capital for their business in exchange for giving up a small share of their income over 10 years. The idea is to give graduates a real shot at starting a company and not just take a traditional job to pay off student loans.

“I think it can be giant, ” said Dave Girouard, the founder of Upstart and former vice president of apps at Google. “It’s a whole new form of risk capital.”

With Upstart, a student creates a profile that includes achievements and goals. The student then chooses the funding amount, and Upstart calculates the percent of income the student will have to share during repayment. There is no repayment in years when income is less than $30,000. Backers can commit funds in increments of $1,000. Mentoring and support are also provided.

The company will make its platform available to students and recent graduates in September at Arizona State University, Dartmouth College, Rhode Island School of Design, University of Michigan and University of Washington.

College graduates just need some help to get on the path to becoming a business owner, Girouard said.

“They want to kind of do their own thing but most of our economy is not geared to help that,” he said.

Upstart itself has an impressive lineup of backers. They include Kleiner Perkins Caufield & Byers, New Enterprise Associates, First Round Capital, Crunchfund and Mark Cuban, owner of the Dallas Mavericks.

Original post is Upstart Aims to Crowdfund Entrepreneurial College Grads by Tech Deals.

Photographer: Justin Sullivan/Getty Images

HireArt and Coderwall both aim to replace the run-of-the-mill resume with online applications that do a better job measuring an applicant’s skills.

The investors assembled at Y Combinator’s Demo Day in Mountain View are no strangers to the challenges of finding top engineering talent in Silicon Valley. So the crowd was especially attuned to pitches from HireArt and Coderwall, which are working to make it easier for startups to staff up well.

Besides going through the Y Combinator incubator together, HireArt and Coderwall have a lot else in common.  They’re both founded by former McKinsey & Co. consultants. Both seek to raise $1 million from investors. And both aim to replace the run-of-the-mill resume with online applications that do a better job measuring an applicant’s skills.

HireArt helps recruiters who need to hire talent with a specific set of proven skills. Need a copy writer? HireArt vets candidates with writing samples. Need a head of marketing? The site picks from those who have provided sample sales pitches. “What’s the best way of finding whether someone can do something?” asks Eleonora Sharef, the former McKinsey consultant who co-founded the company last year. “Ask them to do it.”

Sharef intends for the system to help companies find what she calls “Moneyball candidates” — a nod to the Michael Lewis book about using statistics to build a better baseball team for less money — that they would not have discovered using paper resumes. The other new company, Coderwall, is focused more narrowly on the hot market for programmers.

On Coderwall’s site, programmers are awarded badges for accomplishing feats of varying skills. One badge depicts a coiled-up snake and is given to coders who have built a program using the computer language Python. Another, showing a bird feeding a hatchling in a nest, is given to programmers who have helped out on an open-source project.

“I wanted to figure out a way to attract developers, so they could come and show what they’re doing,” said Matthew Deiters, who founded Coderwall after working at McKinsey. ”I can tell what skills you possess and how involved you are with that technology. It’s very different than the LinkedIn resume.”

During the pitch, Deiters made no secret of his ambition to knock LinkedIn from its professional-networking perch: “I look forward to talking to anybody that wants to eat LinkedIn’s lunch.”

Original post is McKinsey Alums Target Tech Talent War With Y Combinator Startups by Tech Deals.