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.
Always protect the "core" of your business. It really doesn't matter who the developers are. Your first responsibility is to ensure that whoever is writing the source code has a strong and long term relationship with you and your business.
Take the selection process very seriously and check referees, talk to previous clients or employers and complete due diligence very thoroughly. Good coders, for example, should make plenty of comments within the script so that anyone who comes after can pick it up and run with it quickly. I have seen many businesses suffer because of a fall out with the coder who didn't do this. A new coder comes in and wants to rewrite!