It'll be interesting to find out the standard startup reaction once he takes on an additional employee and changes "No thanks, I'm a freelancer" to "No thanks, I have my own small business. But give me your card and I'll let you know if something opens up..."
As a freelance worker, I find this interesting... it seems like a big gap between "I only have to make enough off this to make my time work out for me" and " I have to make enough off this to make a profit off someone else's time". I don' think that the second works out very well for where I am in life, but it seems to be where most of the people I work with find themselves.
IME, generally startups aren't looking for agencies, because they have at least enough knowledge to hire individuals rather than agencies or turn-key solutions.