The second problem is even further exacerbated as early startups don't want "employees". They want "Employee #1"; someone who is passionate and ready to help push the company forward.
I'm in my senior year of college here in the US and this definitely nails it for me. I've had some solid internships where I've done actual coding / ops / etc, but I don't feel like I'm at the technical level where I could graduate and make huge impacts for a startup.
Are startups who are past the "Employee #1" phase (or even employees 2-5, I'd imagine) in a different position in regards to this? (ie more willing to bring on a recent grad, because they already have strong technical employees/leadership pushing the company forward)