have built a company in the middle of the country as well, and know this freelance type. Typically they are "okay" at design and "okay" at development. They work well for local small businesses but not for startups looking for top caliber design.
I agree with jsavimbi. If you're able to hire specialists, then do it. But, if you're looking to get multiple roles out of the same person, you should be willing to take the pros and cons.
Also, if you're in the situation where you have to hire generalists instead of specialists, you are likely a small business, rather than a high growth startup. If you have a war chest and are looking to scale, it's a mistake not to hire specialists -- you as the business owner should be able to tie everything together, not an employee.
Most startups aren't looking for, and shouldn't be looking for, top caliber design. It costs too much and usually provides no measurable value for an immature product.
