Depends what you're trying to do with beta testers.
If you're just trying to find bugs, you're going to want to get them involved around code complete date, but you're going to need to make sure to plan on doing a good chunk more development. The day before won't work if they find 5 critical bugs.
If you're trying to get feedback on the functionality/concept, get them involved as soon as you have a minimally viable product (#leanstartup, as Mike said). Set up a forum for them to post ideas and feedback (Disclaimer: I work for UserVoice, and we make such a forum) and start learning what sucks. Because a lot of it probably does (it does with every product).
GETTING beta testers is definitely a challenge. But you hopefully know your target market, and you should be able to find out where they hang out. Join a related group on LinkedIn, participate in an industry chat, comment on their blogs. Get to know them a little and then ask if they wouldn't mind giving you feedback. And give them a free account for life...they're saving your butt, so don't even think about turning around and charging them.
Hope that helps!