Around waterloo it's actually normal for startups to be based around coop labor, they are cheap and the commitment is short (4-8 months), and best of all you get big tax breaks in Ontario if you hire students. Something else to keep in mind is that a waterloo coop student in their last year of coop has had at least 16 months work experience (To graduate the coop program you need to do at least 20 months of internships), so these aren't fresh out of class interns.
Ouch. This does not describe my experience. My co-ops have generally been great and I have hired (or attempted to hire) more than one of them upon their graduation.
Of course, hiring co-ops is like any other kind of hiring - you have to match the right person to the right task.
1. At least 1 in 4 co-ops will just suck, and you're stuck with them for 4 months
2. The ones that are good are gone in 4 months so you're stuck having to replace + retrain constantly
3. Google and Facebook are offering co-ops $40/hr + free food + free rent + free massages + free blowjobs on Thursdays, so they always get the best ones. It's insane. As a tiny underfunded startup it's really hard to compete with that.
wow, the war for talent really is heating up.