I'm working on a startup on the side, and during the day I work with a couple of really amazing programmers on H1 visas. We get along great, I asked them to help, and before they started working my co-founder suggested we ask a lawyer, just in case.

We called the Murthy law firm (http://www.murthy.com/consult.html - experts in immigration law) for a free consultation and unfortunately were told that not only could my coworkers not work for us unless they A) got an additional H1 Visa and B) were paid market rates but that they even came by and made the coffee on a regular basis they could be endangering their Visa status. We would have to actually put them on the payroll, which in our case would mean actually having a payroll.

Now, that is probably a bit alarmist but its the kind of thing that might scare off investors in the future. The sad part is that these guys would do amazing things for the startup. They have tons of free time, are absolutely the best programmers I've ever worked with and alot of fun as well.

So I'm no lawyer, just thought I'd share the bit of info I got on the subject.