When to hire a fractional CFO.

The phrase "fractional CFO" gets used loosely. It covers bookkeepers who upsold themselves into a title, retired finance executives running a slow consultancy, and operators embedded inside venture-backed companies as actual financial leadership. They are not interchangeable. The version you need depends on what is broken.

Here is the framework I use when a founder asks whether it is time.

Five signals it is time.

1. You are six to twelve months from a raise.

The most expensive mistake a founder makes is showing up to a raise with a model the partner cannot defend internally. A real model takes a full quarter to build, a second quarter to pressure test, and a third to refine through investor feedback. If a raise is in the calendar, the work starts now.

2. You cannot answer "how long is runway" within ten seconds.

Not roughly. Exactly. If your answer is "around eighteen months, I think," you do not have a forecasting system. You have a guess. Founders who run on guesses make hiring decisions that drain six months of runway they did not know they had.

3. Your cap table is starting to make decisions for you.

Pre-seed founders who have run two or three SAFEs without modeling the conversion math are walking into seed rounds with diluted ownership they did not expect. If the cap table is doing the math for you instead of you doing the math for it, the conversation needs to happen now.

4. You are about to close your first priced round.

Priced rounds change the company. Option pool expansion, pro rata rights, board composition, anti-dilution provisions. None of it is reversible. A fractional CFO who has been through priced rounds will save you economics you would otherwise give away in term sheet negotiation.

5. You are scaling a team faster than the operating system can hold.

Once headcount crosses about ten, the founder cannot personally hold every cost decision, every contract, every renewal. A fractional CFO installs the cadence (monthly close, weekly cash, hiring sequencing) that lets the company scale without the founder becoming a bottleneck.

Three signals you are not ready yet.

1. You do not have product-market fit.

If you are still searching for what the business actually is, a CFO is the wrong hire. Spend on product, customers, and the founder's time inside the work. Financial infrastructure is built to capture and scale validated business motion, not to find it.

2. You have less than six months of runway.

At under six months, the company needs immediate capital action, not infrastructure. A short scoped engagement (investor narrative, model rebuild, bridge financing) may help, but a full fractional CFO retainer is the wrong shape for the moment. Solve the cash question first.

3. You are looking for a bookkeeper.

If the work is reconciling QuickBooks, paying vendors, and chasing receipts, you need a bookkeeper or controller, not a CFO. The two are different functions. A fractional CFO operates above the close, not inside it.

What "embedded" actually means.

Some fractional CFOs read your reports and email you a memo. That is an advisor, not a CFO. An embedded CFO sits inside your operating cadence: monthly close review, weekly cash, board pack, hiring sequencing, investor diligence. The model, the data room, the cap table, the reporting infrastructure. Those are owned and updated, not commented on.

The test is simple. Ask a candidate what they will own. If the answer is "I will advise on," you are talking to an advisor. If the answer is "I will own the financial model, the data room, the board pack, and the cap table," you are talking to a CFO.

The cost question.

Founders compare fractional CFO retainers to full-time CFO salaries and conclude fractional is expensive on a per-hour basis. The comparison is wrong. A fractional CFO is not a discounted full-time CFO. It is a different product entirely. You are buying judgment at the inflection points where structure decides the outcome, with no equity refresh, no severance liability, and no obligation past the engagement.

The real comparison is not fractional CFO versus full-time CFO. It is fractional CFO versus the cost of doing the next twelve months without one. For most venture-stage companies preparing to raise, that comparison is not close.

How to hire one.

Once you know it is time, the hiring process is short. Five things separate a real CFO from a title.

1. Ask what they will own.

This is the test from above, and it comes first. You want a list of things they are accountable for, not a list of things they will comment on.

2. Ask to see the work.

A model, a data room index, a board pack, a cap table with the next round modeled. Redacted is fine. If there is nothing to show, there is nothing to buy.

3. Check that they have sat in the seat at your stage.

A CFO who has closed priced rounds reads a term sheet differently from one who has only reported on them. Ask which rounds they were in the room for.

4. Agree the scope and the term before you start.

Write down what is in, what is out, and how long the commitment runs. My minimum is six months, because the first quarter is the build and the second is where it starts paying back.

5. Call a founder they have worked with.

Ask one question: what changed in the first ninety days? The answer tells you whether you are hiring an operator or an observer.

Quick answers.

When should a startup hire a fractional CFO?

Six to twelve months before a raise, or as soon as you can't say exactly how much runway you have. Those are the two triggers I see most.

What size company should hire a fractional CFO?

Stage matters more than size. I work with companies from pre-seed through Series A, and some are pre-revenue. What they share is a raise inside the next year and nobody who owns the numbers.

How much does a fractional CFO cost?

A full-time CFO at seed or Series A runs roughly $170K to $240K in base salary, before benefits and equity. My minimum retainer comes to about 20 to 25% of the full cost.

When should a startup hire a full-time CFO instead?

When finance needs someone in the building every day. For most venture-backed companies that comes later than founders expect, well after the Series A. When it happens, I hand over the system and train the person who takes it.

What is the difference between a fractional CFO and a fractional COO?

A fractional CFO owns the numbers and the raise. A fractional COO owns how the company runs: hiring, the weekly cadence, the sales process. I do both, depending on what the company needs.