Would love to hear more about what makes them ideal freelance clients. As a former contractor/freelancer, I specifically made a point of staying far, far away from these kinds of clients.
The main lesson I've learned working with startups is that consulting is always easier working for people that are spending other people's money. The guy who spent the last year saving $10K of his personal earnings to build his genius daily deals for big data social mobile app? He's going to try to squeeze you for everything he can get. The startup that raised a $1.5MM series A? Going to treat dealings like a business negotiation and probably be less emotional to deal with.
That being said, you still want to manage risk based on who you're dealing with. If I'm consulting for a company with $50MM in revenues and 200 employees, I'm not worried about them going under tomorrow, so I'll let them pay me monthly net-30. If I'm consulting for a 5 person startup that's operating on a seed round, I'll usually require weekly net-7 or net-15. I've started avoiding companies that seem sketchy or are operating off personal savings, but if I was going to work with those types of clients in the future, I'd do a prepaid retainer.
Of course, this varies on a case-by-case basis so YMMV.
They talked about requesting weekly billing which is paid upfront, eliminating collection issues.
[1](http://www.freelancersshow.com/the-freelancers-show-097-week...)
As an example, I believe Kevin Rose took his savings ($10,000 if I remember correctly) and paid a freelancer he found on Elance to build the first version of Digg.
It's not great. But turns out okay. It did become a passive income. (I know it's very rare to happen.)
For reference, typical projects include a product matching software to link buyers at large chain stores with product (spectacular failure, by the way) and yet another professional certification automation site.
First and foremost, it's interesting, typically greenfield work where I don't have to come up to speed on old code.
Second, I'm am earlier in my career, and it has been a really good way of getting relevant, larger-scale projects into my CV.
Third, I can charge the same rate as I do with my agency clients and that makes them super happy because they aren't paying the agency but, at the same time, there are a lot of issues that I don't have when dealing directly with a typical agency client: generally, they feel more inclined/involved, get back to me quickly, have strong (usually well formed) opinions.
And while I can't really get a whole lot of money out of these clients, generally I get more than I would as a subcontractor on the project, which is quite a bit.
There are indeed bad projects in the space... I worked briefly on part of an optimizely clone where although I personally liked the principles and thought they had an interesting product, they were very unorganized and generally hard to work with... but that's true of any space and at least I don't have an agency pressuring me to do the project even thought I think it is bad situation.... which, in the end is the best reason: I can walk away from these things if they don't go well, having been paid well, but less than they would have spent on an employee or hired a firm.
Thinking about it maybe that bit of risk management indicates that it's not so much that these are "ideal" freelance clients, but rather than being a freelance is a better kind of relationship for both sides in terms of managing risk.
I've heard of deals where say I discount my rate by X in exchange for Y% equity. Would love some rule of thumb numbers of what X and Y are.