When to Hire a Full-Time CFO
How to know when your startup is ready for a full-time Chief Financial Officer— and how to avoid hiring too early or too late.
The CFO question comes up at every board meeting once you hit a certain stage: "When are you going to hire a real CFO?" Some founders rush to hire too early, bringing on senior executives before the company can leverage them. Others wait too long, struggling with finance complexity that overwhelms their fractional support.
Getting the timing right matters. A CFO is one of your most expensive hires—typically $250K-$400K+ in total compensation plus significant equity. Hire too early and you waste resources and may end up with a bad fit. Hire too late and you'll scramble during critical moments like fundraises or acquisitions.
This guide helps you recognize the signals that indicate it's time for a full-time CFO, understand what to look for, and avoid common hiring mistakes.
The Bottom Line
Most startups don't need a full-time CFO until Series B or later. Before that, a combination of a fractional CFO and controller typically provides better value. But there are specific situations that accelerate the timeline.
Fractional vs. Full-Time: The Trade-offs
Before diving into timing, it's worth understanding what you gain and give up with each model.
Fractional CFO Advantages
Cost Efficiency
$3-10K/month vs. $25-35K/month for a full-time CFO. Major savings in the early stages.
Senior Experience
Fractional CFOs often have more experience than a full-time CFO you could afford at your stage.
Flexibility
Scale up for fundraising, scale down during quieter periods. No long-term commitment.
Pattern Recognition
They work with multiple companies and bring insights from seeing different situations.
Full-Time CFO Advantages
Dedicated Attention
100% focused on your company. Available for every meeting, every question, every crisis.
Team Building
Can build and lead a finance team. Fractional CFOs typically oversee but don't manage.
Executive Presence
A true member of the executive team who can represent the company to investors, bankers, partners.
Deep Knowledge
Develops comprehensive understanding of your business that comes from full immersion.
| Factor | Fractional CFO | Full-Time CFO |
|---|---|---|
| Annual Cost | $36K-$120K | $250K-$400K+ |
| Equity | Usually none | 0.5%-2%+ |
| Availability | 10-40 hours/month | Full-time |
| Best For | Seed to Series A | Series B+ |
Signals It's Time for a Full-Time CFO
There's no single trigger that says "hire a CFO now." Instead, it's usually a combination of factors. When you're seeing several of these signals, start the search.
Stage and Scale Signals
You've raised Series B or are preparing to
Series B investors often expect to see a CFO on the team or in the hiring plan. The complexity of a $20M+ raise often requires dedicated executive attention.
Team size exceeds 50-75 employees
Around this size, finance complexity typically requires full-time executive attention: more departments to budget, more contracts, more compliance.
Revenue exceeds $5-10M ARR
At this scale, the financial operations become complex enough that part-time oversight isn't sufficient. Revenue recognition, collections, pricing strategy all need attention.
You have or need a finance team of 3+
A fractional CFO can oversee 1-2 people, but building and managing a real finance team requires a full-time leader.
Complexity Signals
You're facing an audit
Your first audit is a major undertaking. Having a full-time CFO to manage the process, implement controls, and interface with auditors is valuable.
You're expanding internationally
International operations add significant complexity: multi-currency, transfer pricing, local compliance, entity management. This often tips the balance.
You're considering M&A
Whether buying or selling, M&A requires intensive CFO involvement—due diligence, deal structure, integration planning. A full-time CFO should lead this.
You need debt financing
Banks and lenders want to deal with a CFO. Venture debt, credit facilities, and equipment financing all benefit from having a dedicated finance executive.
Bandwidth Signals
Your fractional CFO is maxed out
If you're consistently using 40+ hours/month of fractional time and still have unmet needs, a full-time CFO may be more effective.
The CEO is still doing CFO work
If the CEO is spending significant time on financial matters despite having a fractional CFO, the company may need more dedicated support.
Finance decisions are bottlenecked
If important decisions are waiting for the fractional CFO's availability, that delay may be costing you more than a full-time hire would.
Signs It's Too Early
Hiring a full-time CFO too early is a common and expensive mistake. Here are signs you should wait:
You haven't raised Series A yet
Pre-Series A, the cost and equity of a full-time CFO rarely make sense. A fractional CFO plus bookkeeper provides better value.
Your team is under 30 people
Small teams don't have enough finance complexity to keep a CFO engaged. They'll either be bored or will over-engineer systems you don't need.
You don't have product-market fit
If you're still figuring out your business model, a CFO hire is premature. Focus resources on finding PMF first.
Your fractional CFO is handling things well
If your current setup is working—timely financials, smooth board meetings, manageable complexity—don't fix what isn't broken.
You're hiring for status, not need
"We should have a CFO to look professional" is not a good reason. Hire when you have real work for a CFO to do.
The Cost of Hiring Too Early
- Wasted salary: $200K-$400K/year for capability you don't fully utilize
- Equity dilution: 0.5-2% equity that could go to other hires or the option pool
- Cultural mismatch: Senior executives from larger companies often struggle in early-stage chaos
- Over-engineering: They may build systems and processes premature for your stage
What to Look For in a Startup CFO
When you're ready to hire, finding the right person is critical. Startup CFO is a very different role from corporate CFO.
Must-Have Qualities
Startup Experience
They should have scaled a company through similar stages. Someone from a Fortune 500 won't know how to operate with startup constraints.
Hands-On Ability
At Series B, your CFO still needs to do real work, not just manage. They should be able to build a model, not just review one.
Strategic Thinking
Beyond the numbers, they should understand business strategy and how finance enables it. They're a partner to the CEO, not just a reporter.
Communication Skills
They'll present to the board, talk to investors, and work with department heads. Clear communication is essential.
Interview Questions
- "Tell me about scaling a finance function from [X] to [Y] employees."
- "What finance systems and processes did you implement at your last startup?"
- "How would you approach our Series C fundraise?" (Give them a realistic scenario)
- "Walk me through how you've handled a cash crisis or runway scare."
- "What's your approach to working with department heads on budgets?"
- "Give me an example of a strategic decision you influenced beyond pure finance."
Red Flags
- All experience is at large companies (>1,000 employees)
- Can't articulate how they'll add value beyond "improving reporting"
- Uncomfortable with ambiguity or rapid change
- Wants to hire a big team before understanding the work
- Talks about what they need (title, comp) more than what they'll deliver
- No experience with fundraising or investor relations
Compensation Expectations
CFO compensation varies significantly based on company stage, location, and the individual's experience. Here are rough benchmarks:
| Stage | Base Salary | Equity | Total Comp |
|---|---|---|---|
| Late Series A | $180K-$250K | 1.0%-2.0% | $200K-$280K |
| Series B | $220K-$300K | 0.5%-1.5% | $250K-$350K |
| Series C | $280K-$380K | 0.25%-0.75% | $300K-$420K |
| Late Stage / Pre-IPO | $350K-$500K+ | 0.1%-0.5% | $400K-$600K+ |
Compensation Notes
- Bay Area and NYC command 15-25% premium over other markets
- Title matters: "CFO" typically costs more than "VP Finance" for similar roles
- Prior IPO or M&A experience commands premium
- Equity percentages decrease as valuation increases (absolute value may stay similar)
The Transition Process
If you're currently working with a fractional CFO, transitioning to a full-time CFO requires care to ensure continuity.
Transition Timeline
3-6 Months Before: Start the Search
CFO searches take time. Start when you see the signals, not when you're desperate. Your fractional CFO can help define the role and screen candidates.
Offer Stage: Plan the Overlap
Plan for 2-4 weeks of overlap between your fractional CFO and the new hire. This ensures knowledge transfer and continuity.
Week 1-2: Intensive Onboarding
The fractional CFO walks the new CFO through all systems, processes, relationships, and in-flight projects. Document everything.
Week 3-4: Supervised Handoff
New CFO takes the lead with the fractional CFO available for questions. Ideally includes one month-end close together.
Month 2+: Advisory Available
Some companies keep the fractional CFO on a light retainer for a few months as a resource for the new CFO to consult.
Common Mistakes to Avoid
Hiring for the Wrong Stage
A CFO who built a finance team at a 500-person company may not be effective at a 40-person startup. Match experience to your current and near-term stage.
Prioritizing Pedigree Over Fit
An impressive resume from big-name companies doesn't guarantee startup success. Look for evidence they can thrive in your specific environment.
Undervaluing Cultural Fit
The CFO will work closely with every department. If they don't mesh with your culture, friction will impact the whole organization.
Not Defining Success Clearly
Before hiring, define what success looks like in the first 6-12 months. What specific outcomes do you expect? Align on these during the interview process.
Rushing Due to External Pressure
Don't hire a CFO just because your board is asking. If you're not ready, a bad hire is worse than no hire. Explain your reasoning and timeline.
Related Articles
Scaling Your Finance Function
Complete guide from seed to Series B
Fractional CFO vs Full-Time CFO
Detailed comparison of the models
Finance Team Structure
Building your team as you grow
Fractional CFO Guide
Everything about fractional CFO services
Not Ready for a Full-Time CFO?
Eagle Rock CFO provides fractional CFO services for seed and Series A startups. We can help you build the foundation before you're ready for a full-time hire.
Schedule a Consultation