[ChuckMcM]

So back in the dotcom days there was this thing where Startup A would give Startup B some product or service "valued at" some number in exchange for Startup B giving them some product or service "valued at" and equivalent kind of amount. They did this because both A and B could report "sales" of $x revenue with a moderately straight face, even though no money changed hands and it was entirely unclear if either A or B would have paid $X for the service/product they got if they were actually exchanging real money. So for example the startup I was working at got a $120,000 data base installation in exchange for $120,000 worth of banner ads on our site.

There were two problems with that, first the investors were somewhat misled (seeing only the 'sales' numbers and not the actual dollars in the bank number) and two the IRS went after folks who were saying "millions in revenues" for taxes on those revenues which, since they were in trade goods rather than dollars, the companies didn't actually have money to pay the taxes.

Its this latter bit that worries me about this idea. If you give equity for work you have to provide a value for it. You have to give the person a 1099 form (if its over $600) and they may end up owing income tax on an illiquid asset.