Eric Ries intimated in "Lean Startup" that nobody would steal our ideas, but I have concerns with an external agency or developers having possession of source code that would be the core of our business. Is this an unfounded fear? When funding permits, I would like to explore having an in-house development team, but quality agencies and developers seem to be available to hire in abundance. If my startup is bringing in revenue and profiting, is it unusual to continue a working relationship by outsourcing development to a third party? I'm thinking in the most economical sense, that this is sensible, however there are certainly other concerns to consider.
I've built several successful MVP's with contractor labor and I've worked at an agency where we built prototypes for entrepreneurs and companies. My experience is that working with any form of agency is not advisable for an MVP, but not because of security concerns (as others have already addressed).
An MVP will inevitably require multiple iterations to achieve product/market fit or provide you enough data to run a different experiment.
I built the site http://www.tellyourbossanything.com for less than $5,000 in contractor expenses and was lucky to get a ton of high quality press the first few days of launch that brought a few thousand users to us in the first week.
From there, we invested more money to iterate and build. No agency would have been able to iterate fast enough or efficiently enough post MVP.
I would advise that you look for a contract designer and a contract engineer (or two) to work with you. If you're unsure of whether you're qualified to manage these resources or where to look, happy to do a call with you!