In a start-up you must have best recruiters possible. Unfortunately, quite often, this is not a case. Many recruiters just pick candidates from job search engines, like yahoo jobs, dice or monster and trying to present them to you as if they identified them.
More than that - if you hire person who was found on a search engine, but by any chance (which is quite high) such recruiter also have send you same candidates resume, he can claim that you owe him the fee.
Considering that many of such recruiters keep litigation lawyers on contingency, you can face a lawsuit very fast if you reject to pay such a fee.
I was recently involved into "damage control" situation, when reckless executive behaviors enabled recruiter to sue the company and actually get some money in a process - as for businesses very ofter it is easier to pay than to engage into lengthy lawsuit.
As a person in charge of hiring, it is very important to make sure that agreement clarifies what search of candidates you expect from recruiter.
Another important point - always make sure to have a written agreement in place. Never agree to have couple candidates to be presented to you "just to show how good I am". This is an invitation to a legal troubles.
As a person in charge you already know what percentage / fee you are willing to pay and what other conditions for candidate search you need to have in place. Ask recruiter to send you an agreement, modify it with change tracking, send it back, execute it. After that let him present candidates.
Fees in general:
25% today is a standard proposed fee. I have negotiated 20% with the majority of the search firms. Some companies tried to set 30-35%, but in todays economy this is not reasonable and should not be considered
Usually recruiter propose 30 days free replacement if candidate left of let go. In complex technical and business positions, this is nearly not enough to understand if person fully fits the position or not.
Always request free candidate replacement within 90-120-180 days - whatever longer you can negotiate. I manage to negotiate 120-180 days with many recruiters.