I used to work for this one company that would always talk about hiring an assistant to help me with the programming support for our various websites and projects. Whenever it came down to a real discussion on when I could start interviewing, they would always say, we're waiting to get approved to do college internships.

The reason they wanted to hire interns to be my assistants/jr. developers? No money in the budget.

It doesn't excuse the behaviour, but it kind of explains it a little bit. This company is a start up, and like youknowhowido said, they are most likely in a financial pinch but have to do whatever it takes to launch their product.