TC50: Startups can trade favors at TheSwop.com

When you’re running a startup, you don’t have a lot of money to spend on services. That’s why startups often trade services between each other, or look for bartering opportunities. A company called TheSwop.com, which debuted its product at the TechCrunch50 event in San Francisco today, has created a site that formalizes that favor-trading process.

The site is built around “favor points,” which are earned whenever you provide services to another company — say one of your developers spends some time building a website. Then you, in turn, can post jobs that you need done — say you don’t have anyone who can do marketing — and offer favor points in exchange. In the end, startups can get many of the basic services they need for free, potentially saving themselves tens of thousands of dollars. Or you can get paid in a mix of favor points and real money.

TheSwop.com says it plans to make money through a “freemium” model, where access to the site is free, but startups pay extra for services like complete service directories.

Some of the judges were skeptical, pointing out that money was invented for a reason: After a certain point, bartering just doesn’t make sense.

TheSwop.com says it will be working hard to control the value of its favor points virtual currency, starting by only allowing 100 startups into the site at a time.