Do good startups use 3rd party recruiters?

A majority of the top startups still use 3rd party recruiters. It’s absolutely possible to find a good start up position on your own, but it doesn’t hurt to utilize the help of recruiters. There may be several companies they’re working with that you may not have considered or known about.

Also small ones don't have in house recruiters

Absolutely, they do. Depending on the size of the org and how quickly they want to scale, 3rd party recruiters (agencies) can be an excellent way to hire top talent quickly. Sure, they collect a 20% cut of your first year base salary from the company, but from the candidate perspective if your network isn't extensive or you want to expand your horizons, working with an agency could be quite beneficial. The key here is to ensure you're working with a quality recruiter - one that is tuned into what you're seeking and has a good sense of the market in your target area. It's certainly worth trying to work with an agency while you also work with your own network and apply to places on your own. Never hurts to have multiple search avenues going. Do note that personal referrals are hands down the most effective way to get hired and also the most desired avenue for companies to recruit and the interviewing process is totally expedited.

Just their network? Unless you're only targeting companies that are 1-30 people they're likely using a 3rd party. Some investors even have their own recruiting service to help their investments with placements.

In my recent experience, never. All the places with interesting jobs and reasonable pay had dedicated recruiters

Yes, it's usually when they need them most. Once they're larger and constantly looking to fill positions, it starts to make a little more sense to bring on in-house recruiters. Both because of the lower cost and the bar is lower. Regardless of company size, the Good agency recruiter will almost always outperform the in-house ones. Incentives.