That's different. Equity is a form of payment (although, admittedly, it is a gamble). However, the way that you advertised it here really makes it sound like you are looking for free work, and a naieve student to take advantage of. And working without any sort of compensation is indeed being taken advantage of.
Also, as a side note, I suspect (and Google seems to support) that American students have far higher costs for going to university -- I believe that in Europe, the tuition fees are significantly cheaper thanks to government subsidies. With lower costs, there's less pressure to earn money to cover the costs.
You make a valid point above. We are not looking to screw people out of money. We were hoping to offer someone a good experience, and begin line up future employees for when we could afford to pay them.
We apologies, we appear to be poorer than the students :)
Just put it into the ad next time, and it might look less like you're trying to screw the students over.
I know this isn't true of all coders, I know there are some good guys out there who would take a risk and would do this to benefit from the greater reward. Working for equity is clearly not something you are interested in. Nor is the environment of a startup. Why are you here then?