That guy is setting himself up to have his time wasted by an endless string of idiots. If you offer to work for free, that is exactly the value people will place on the work you do.
Exactly! He might not have thought this all the way through. He will have to spend tremendous amount of time verifying if the idea people actually do have any connections to the industry. Idea people who can't execute but can BS well will ruin his day.
He is not offering to work for free, he is offering to work for profit sharing. By not asking for hourly cash, it sounds to me like he is hoping to get a larger piece of the pie.
Required reading: http://www.povonline.com/cols/COL209.htm