I've read a lot that there is a shortage of developers for startups to hire, but I don't really believe it. Can someone in the industry confirm that there is in fact, not enough developers up for grabs, for startups?
There is a shortage for developers with certain skill sets, in certain locales, at certain prices which companies are willing to pay.
If we get away from the baggage of the word "shortage", it is a true statement that the hiring market currently favors those who are selling talent as opposed to those who wish to purchase talent, across a wide variety of first-world metropolitan areas, in many fields of software engineering, including but not limited to fairly generic web and/or application development.
I think there is a shortage of developers of the quality that startups want to hire for the price they want to hire them.
Digging a bit deeper - I do think there's a pretty universal shortage of high-quality developers in the software world. Understand your CS fundamentals + current technologies and have decent social skills and you will never lack for work. I think that Google and Facebook have gobbled up the vast majority of these developers, because they are willing to pay higher wages than most startups can. That's the way economics works: the people who can pay the most get first crack at the supply.
As others have stated, the shortage is in the number of quality developers that are willing to work for under market rate. I had several startups in SF offer me 60-80k, and I laughed my way out of each of those interviews. I get that startups have to stay lean and not overspend, but development talent is one place you absolutely don't want to cut corners.
I think that's the real sticking point - quality developers are going where they'll get paid what they're worth, and in most cases that's not startups on shoestring budgets that could go under at any minute. It helps to keep in mind that quality developers are often older, with families, who want to find somewhere they can be well-compensated for putting in a solid day's work before going home in time for dinner. This doesn't seem to jive with what a lot of startups expect of their employees.
By the way, I don't mean to put all startups under this generalization: this purely based on anecdotal evidence from myself and people I know.
As a developer looking for work I found a ton of startup job opportunities in the NYC area. But I found the companies hiring for a very specific set of skills (frameworks, insert random buzz words) instead hiring for general ability and knowledge. It's an interesting dynamic as the startup has limited funds and limited time. They want someone who can jump in on day one without any learning curve. The smaller startups are willing to wait for the perfect candidate because hiring the wrong person could be a disaster.
In my own startups I've found the developers I know love the idea of working for a startup. But when it comes down to it, they are risk averse and value job security and cash compensation over the freedom and equity that a startup offers.
As echoed by others on here, there is a shortage of __good__developers for hire. I've seen plenty of developers get interviewed at some startup companies only to be turned down for the job and I've known a few that were trying to apply and get denied. Majority of companies are hiring but that doesn't mean they'll hire just any developer. The issue is developers are not all created equal and I've been around enough developers to know that rejection is common, some times several rejections, before they finally are able to land a job somewhere (not necessarily even a startup by the time its done).
I can vouch for the fact that in Chicago at least, there seems to be a shortage of quality developers. Or perhaps rather, our company (and every other tech-focused company I know of) has a continual burning need to hire more quality developers than they can find.
I don't know what "for startups" has to do with it, but if it matters, I work for a 90-person company that calls itself a "mature startup." :)
In addition to the pay issue addressed in all of the other answers so far, the top tier programmers are also likely to be looking for more stable employment. A single college grad with no experience can take a gamble on a startup, but someone with a few years of experience and a family is more likely to want a job that they know will be around for a few years.
There's a shortage because employers don't want to pay enough. Hence employees take advantage of the free market for their labour and go to places which pay more (competition at work!).
We had a personal issue with recruiting developers
The main problem is the high cost you need to pay for these developers to make your startup a real option for them.
If we get away from the baggage of the word "shortage", it is a true statement that the hiring market currently favors those who are selling talent as opposed to those who wish to purchase talent, across a wide variety of first-world metropolitan areas, in many fields of software engineering, including but not limited to fairly generic web and/or application development.