Who to get as programmer?

Hire a contract programmer with at least eight years of experience to write your prototype. Expect to pay $60/hr for two to four months for a prototype. You say it's a prototype, but it will be selling in prototype form before you know it. A kid just out of college will make a spaghetti code mess. It will work and be cheaper up front, but it will bite you in the long run.

I've worked at half a dozen places where the core software had a mess of internals that was an ongoing painpoint. It was like that because of a rush up front combined with fresh-from-school coders to save money.

There are a number of respectable companies that manage contract programmers. Go with one of those near your location. It won't be necessary to pay in equity up front.

In your case I would hire a programmer. You have the idea already and it seems you have some money. There is no need to share another equity if you have a clear visualization. Hire somebody.

That being said, I would hire somebody who is good. There are good people with a reasonable rate. There are bad people with a huge rate. Please be careful.

You need a guy who has some experience: the first lines of code are very important. If the first lines are bad, the rest will be worse. If you have a good coder, he can recommend you some tooling and will set up a proper dev environment, which is sufficient for a prototype (but not too much which is overkill and not to less which is a time waster). Therefore I would not go with a student.

EXCEPT you understand a prototype as what it is: prototypes in software are written and then thrown away. Many ppl I know are shocked when they hear this first. So please consider: if you want something which is usable and probably runs live, then get a good guy who codes it like that. If you want a prototype to show and throw away, a student might be ok.

oDesk etc looks not very serious for me. Best is, you ask fellow entrepeneurs for recommendations (thats how I get coding jobs). If you have no such friends, google. Look at the webpages. People who blog and do open source show you their work, look into it. If you still don't find such a guy, visit Startup-Events. Sometimes there a programmers there. Also technical conferences are a good place to meet such people.

According to me depends on 4 factors.

1. How much money you have and how much are you ready to invest in development
2. How much time you can afford to bring out the prototype
3. How clear are you with the idea of the complete organisation along with it short/long term goals.
4. Do you have a technical insight of the application you are building.

When to go for a experienced programmer

If you have good enough cash to rope in a pro programmer you should definitely go for that, for he will be having the experience to develop the right stuff according to your needs in a relatively quick time and in a more efficient manner.
Your prototype will be ready in a shorter span which is most likely to keep fears of competition at bay(if your startup is new in the market).
If you don't know in expanse what the end product is going to look like and how broad the market can be and are relying on your angel expertise and power to distribute the application more than yourself, you will need the guidance and experience of the programmer to see you win through the deal.
Finally if you are only aware of the macro economics of your product but are wary about what will be inside to run it you should definitely go for an experienced one without any second opinion, because you need someone capable enough to lay the foundation of a building and cant hand it over to a rookie.

When to go with a fresh grad

You first got to picture; A prototype is a prototype. Its purpose is to display the capability of the application. Not be the application.
You may not have enough cash but have a strong belief in your idea so if you prepare a mediocre prototype accompanied by a strong presentation you are sure to please your angel investor.
You need to be patient and let the freshness come to the party. He will bring a lot of new ideas a lot of new scopes some which will really be off the concept. But when heard carefully you are bound to find some things that you never thought of before and wonder how you missed it. But again it will take its own time.
You are having the skills of both a good developer and an entrepreneur and by good developer I mean you have good knowledge of what and how it is to be developed, i.e. grain level knowledge using which you can guide the fresh mind, and you are canny enough to strike a good deal and have a plan laid out how to carry it forward.

If neither of you are technical you are probably not qualified to interview individuals for such an important position.

Plus, a single person rarely possesses all of the skills necessary to bring a solid application to market. There is more to an application than programming. For example the user experience and interface plays just as an important role in people wanting to use your application again then the actual programming does.

Assuming you and your partner are truly serious I would suggest setting up meetings with a half a dozen companies that do contract programming in your area.

They typically will have a staff that can handle all aspects of your project and they should be able to show you projects they have done in the past that give you confidence they can deliver on what you need. Some of these may even outsource if you are concerned on the hourly rate you want to pay.

However, there are programmers I know that I would take over a team of 10 ordinary programmers. So, the hourly rate isn't everything.

Also most of these companies will be polite enough to point you in the right direction if you are not an ideal client for them. They may even point you to some places you can find a CTO, or a friend they know that freelances that could help you. It's worth starting to look around in your local community first. Ask friends, co-workers, call your chamber of commerce, get some referrals and find the people in town that are good and go chat with them.

If you don't have enough money for your prototype just bring in some more friends to bring in as partners :)

Get a professional to build the prototype, and steer clear of sites such as oDesk, Elance, etc.

If you have the money available to spend, then be aware that you don't want to waste your money. You may call it a prototype, but before it's replaced, it's likely that you will have users of that application, especially if you are trying to raise capital.

Your choices are therefore:

1. Bring in a CTO: if you can find someone to join your team with the technical skills needed to see your application turn into a business, this can reduce your outlays and ensure that you have long-term vision for the technical aspects to your business;
2. Hire a developer: rather than give up equity, which is difficult if not impossible to recover, you can simply pay someone as an employee, keeping the technical vision within the company - but you'll have to pay the going rate for such skill, which may be as expensive as the third option, plus you can't offer security, since while you hope your idea will result in a successful business, you don't have any past history for someone else to rely on;
3. Contract the development: this is pricey, since you will be paying by the hour, but you also make no commitments to the longevity of your business (beyond paying for the initial contract). However, since the developer is outside your business, beware of the fact that the choices made by the contractor may influence your business in the long run, by someone who doesn't really care about the business itself. As such, you may find yourself hampered down the road with choices made by this contractor that prove expensive layer as well to get rid of.

Unfortunately, there is no easy answer. To mitigate the risk of poor development choices, you can look for someone to assess the best way to develop your application, and put forward those options, which you can then take somewhere else to be implemented.

Alternatively, you can see which technologies have many choices for implementation (i.e. in whatever city you're located in, how easy is it to find a PHP developer vs. a Ruby developer vs. a .NET developer) and then choose a technology stack based on ease of replacement for the contractor.

I'm going to offer a different opinion, one that seems to be controversial, but worked very well for me.

Firstly, consider that your logic to build a prototype, to gain an investor, is fundamentally flawed. Instead, build a prototype to gain a paying customer.

Secondly, don't build the prototype until you've got a customer (or several/many) saying "if you build this, I will buy it".

Thirdly, talk to your intended customers long before you build a prototype.

There would be nothing worse than dropping a ton of your savings on building a prototype that you will end up throwing away. Given that you are not developers yourselves, the amount of time you'll have to put in figuring out what to tell a contractor to build, would be better spent on customer development.

I recommend you read Eric Ries (The Lean Startup) and Steve Blank (The Startup Owners Manual) before spending any money on developers.