Especially in a situation where equity is granted entirely in lieu of fees, the service provider has assumed a risk of receiving nothing for his or her work. Even worse, as a minority shareholder, the majority owners of the business may operate in ways that shareholder may believe will not maximize the value of the stock. While there is certainly the possibility that the company will go public or be acquired by another company, the truth is that most start-up companies fail and that the stock will become worthless. Further-more, stock in a private company is an illiquid asset. Despite the potential value of stock, you can't use it to buy groceries or pay the mortgage.
Greed motivates people in unimaginable ways.
Giving your service providers equity may encourage them to work a little harder and try to make that extra contact. It creates extraordinary incentives to make the business succeed. In essence you have made your service providers your partners and, as you expect your partners to tow that extra mile, you can expect those with an equity interest in your company to maximize the value of the stock. In most situations the goals of all the shareholders are similar, but if the founders have more long-term, steady growth aspirations, it may be inconsistent with another shareholder's interest in having a liquidity event as soon as possible. This may come into play in a subsequent round of investment, a merger or a public offering.