Step 1: pay your interns a fair wage in cash. After you complete step 1, you can do what what you like with equity :). I feel that equity equates to "skin in the game" but is also very close to a lotto ticket. I'd consider a program where interns get options if they return for full time employment after they complete school and then stay for a proper vesting period (1-4 years). Granted, normal employees should get that program too. So maybe you sweeten the deal for interns by reducing time to vest or extra options for having interned.