Fractional CFO vs Full-Time CFO: Which Does Your Startup Need?
A detailed comparison to help seed and Series A founders decide between fractional and full-time CFO options based on stage, needs, and budget.
"Should I hire a full-time CFO or bring on a fractional one?" It's a question we hear from founders every week. The answer depends on your company's stage, complexity, budget, and immediate needs.
This guide breaks down the key differences between fractional and full-time CFOs, helping you make an informed decision for your startup. For a broader overview of fractional CFO services, check out our Complete Guide to Fractional CFO Services.
The Bottom Line
Most seed and Series A startups benefit more from a fractional CFO. You get senior-level expertise at a fraction of the cost, with flexibility to scale as you grow. Full-time CFOs make sense once you hit Series B or have complex operational needs.
Key Differences at a Glance
| Factor | Fractional CFO | Full-Time CFO |
|---|---|---|
| Total Annual Cost | $36,000 - $150,000 | $250,000 - $500,000+ |
| Time Commitment | 5-20 hours/week | 40-60+ hours/week |
| Typical Experience | 15-25+ years, multiple startups | Varies (10-20+ years) |
| Equity Component | Usually none or minimal | Typically 0.5% - 2% |
| Commitment | Monthly, flexible | Long-term employment |
| Ramp-Up Time | 1-2 weeks | 2-4 months (including search) |
| Best For Stage | Seed to Series A | Series B and beyond |
What Is a Full-Time CFO?
A full-time CFO is a dedicated executive who joins your company as an employee. They're a member of your leadership team, typically reporting directly to the CEO and sitting on the executive committee.
What Full-Time CFOs Provide
Dedicated Availability
They're available whenever you need them—early morning calls, late-night crises, and everything in between.
Deep Company Knowledge
Full immersion means they understand every nuance of your business, team, and operations.
Team Building
They can hire and manage a full finance team, building the department from the ground up.
Long-Term Commitment
Equity alignment means they're invested in the company's long-term success.
Full-Time CFO Challenges for Startups
High Cost
Salary, benefits, and equity add up to $300K-$500K+ annually. That's significant runway for an early-stage startup.
Long Search Process
Finding and hiring the right full-time CFO typically takes 3-6 months.
Underutilization Risk
At early stages, you may not have enough CFO-level work to keep them engaged.
Difficult to Unwind
If the fit isn't right, parting ways with an executive is costly and disruptive.
What Is a Fractional CFO?
A fractional CFO is a senior finance executive who works with your company part-time. They typically work with 3-6 companies simultaneously, dedicating anywhere from 5-20 hours per week to each client. For a deeper dive, read our article on What Does a Fractional CFO Do? Day-to-Day Responsibilities.
What Fractional CFOs Provide
Cost Efficiency
Access senior CFO expertise at a fraction of the full-time cost—typically 70-85% less.
Breadth of Experience
Working with multiple companies means they've seen many scenarios and know what works.
Flexibility
Scale hours up or down based on your needs. Add hours during fundraising, reduce during steady-state periods.
Quick Start
Can typically start within 1-2 weeks and be productive almost immediately.
Fractional CFO Limitations
Limited Availability
They're not available 24/7. You share their time with other clients.
Less Day-to-Day Involvement
They won't be in every meeting or know every detail of daily operations.
Not Team Builders
They typically don't hire or directly manage finance team members.
Transition Eventually Needed
As you grow, you'll eventually need to transition to a full-time CFO.
Cost Comparison: The Numbers
Let's break down the real costs of each option. For more detailed pricing information, see our Fractional CFO Cost Guide.
Full-Time CFO Total Cost
Fractional CFO Total Cost
The Savings Are Significant
A fractional CFO costs 70-85% less than a full-time CFO. For a startup that just raised a $3M seed round, that's the difference between 2-4 months of additional runway versus hiring one executive.
When to Choose a Fractional CFO
A fractional CFO is typically the right choice when:
You're Pre-Series B
Most seed and Series A companies don't have enough CFO-level work or budget for a full-time executive. A fractional CFO provides the expertise you need at a cost you can afford.
You Need Strategic Guidance, Not Full-Time Management
If your primary need is strategic financial advice, fundraising support, and board reporting—rather than day-to-day finance management—a fractional CFO can deliver that efficiently.
You're Preparing to Fundraise
A fractional CFO can help you prepare your data room, build models, and get investor-ready in weeks—much faster than hiring a full-time CFO.
You Value Flexibility
Startup needs change rapidly. A fractional engagement lets you scale finance support up or down without the commitment of a full-time hire.
You Want Breadth of Experience
Fractional CFOs work with multiple companies and bring pattern recognition from across the startup ecosystem. They've seen what works and what doesn't.
For more signals that indicate it's time for a fractional CFO, read our article on 10 Signs Your Startup Needs a Fractional CFO.
When to Choose a Full-Time CFO
A full-time CFO is typically the right choice when:
You've Raised Series B or Beyond
Post-Series B, you typically have the budget, complexity, and finance workload to justify a full-time executive. Investors often expect to see a full-time CFO at this stage.
You Need to Build a Finance Team
If you're hiring multiple finance roles (Controller, FP&A, Treasury), you need a full-time leader to recruit, manage, and develop that team.
You're Approaching an IPO or M&A
Public company preparation, major M&A transactions, or complex restructuring require dedicated, full-time CFO attention.
You Have Complex Operations
Multiple business units, international operations, complex revenue recognition, or significant regulatory requirements may require full-time attention.
You're Generating $20M+ in Revenue
At this scale, the financial complexity and volume of work typically exceeds what a part-time engagement can handle effectively.
The Hybrid Approach
Many companies use a hybrid approach: start with a fractional CFO and transition to full-time as they grow. This provides several advantages:
Benefits of the Hybrid Path
- Build infrastructure first: Your fractional CFO sets up systems and processes, making it easier to onboard a full-time CFO later.
- Learn what you need: Working with a fractional CFO helps you understand exactly what kind of full-time CFO to hire.
- Smooth transition: Your fractional CFO can help recruit and onboard their full-time replacement.
- Preserve runway: Save the full-time CFO cost for when you truly need it, extending your runway in early stages.
Typical Transition Timeline
Seed Stage
Fractional CFO (5-10 hours/week)
Series A
Fractional CFO (10-20 hours/week)
Late Series A / Pre-Series B
Begin full-time CFO search (fractional continues)
Series B
Full-time CFO takes over (fractional supports transition)
Decision Framework: Which Is Right for You?
Use this framework to evaluate your specific situation:
Answer These Questions
What's your current runway?
If less than 18 months, a full-time CFO hire may consume too much capital.
How much time per week do you need?
Less than 20 hours/week = fractional likely sufficient.
Do you need someone to build and manage a team?
If yes, lean toward full-time. Fractional CFOs typically advise, not manage.
How complex are your operations?
Simple SaaS = fractional works well. Multi-product, multi-geography = may need full-time.
What's your fundraising timeline?
Raising in 6 months? A fractional CFO can help faster than hiring full-time.
Still Unsure?
Most startups that are uncertain should start with a fractional CFO. It's lower risk, lower cost, and you can always transition to full-time later. The reverse is much harder—it's difficult to "un-hire" a full-time executive.
Related Articles
Complete Guide to Fractional CFO Services
Everything you need to know about fractional CFOs
How Much Does a Fractional CFO Cost?
Detailed pricing guide for startups
10 Signs You Need a Fractional CFO
Is it time to bring on financial leadership?
CFO vs Controller vs Bookkeeper
Understanding the different finance roles
Need Help Deciding?
Eagle Rock CFO provides fractional CFO services for seed and Series A startups. Let's discuss whether a fractional CFO is right for your company.
Schedule a Free Consultation